Zurich residents say yes to the offsetting of business losses in the real estate capital gains tax.

Business losses can be deducted from the property gain tax in Switzerland. Until now, Zurich was the only canton where this was not possible. On June 10, 2018, the voters of Zurich voted on whether this should be changed, and 53.6% of the voters supported the proposal. However, the amendment to the law has a long way to go.

In all cantons of Switzerland except Zurich, companies can offset their operational losses against the property gain tax. Companies from other cantons could still offset their losses with property gain taxes made in Zurich, just not those based in Zurich. This practice is based on a Federal Court decision regarding the prohibition of inter-cantonal double taxation. This unequal treatment for companies based in the canton of Zurich was declared unconstitutional by the Zurich Administrative Court in 2010, as they are systematically disadvantaged by their location. The judgment was appealed to the Federal Court, which did not consider the treatment to be unconstitutional.

Nevertheless, in the spirit of equality before the law, a legislative amendment was initiated by the Zurich Government Council in April 2013, allowing also intra-cantonal companies to make loss adjustments at the property gain tax. It was followed by a consultation period, during which particularly the municipal tax offices spoke negatively about the proposal, as they expected high tax losses. Subsequent calculations showed that no high losses were to be expected. Thus, the proposal was approved by the Cantonal Council in October 2017, which led the Alternative List to take the referendum, leading to the public vote on June 10, 2018. The vote was accepted by the voters of Zurich, but the cities Zurich and Winterthur, which expected the biggest losses, rejected the proposal.

Thanks to the yes to the legislative amendment, companies based in the canton of Zurich can now also offset their operational losses against the property gain tax. This amendment legally equals them to companies from other cantons, as they are no longer subject to fiscal disadvantages due to their location.

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