With the housing shortage in Switzerland showing no signs of abating, one town in the mountains has decided to adopt a new solution to the problem. Officials in the Engadine village of Pontresina have proposed a special housing tax to be placed on second homes in their community.

New housing tax on second homeowners in Switzerland

In a statement given to Blick, Nora Saratz, the president of the local council and authority of Pontresina, introduced a motion to apply a special tax to all second homes in the municipality. All owners of second homes would be subject to the extra charge, with the exception of those who offer the properties for rent or have someone using the home as a primary residence.

Saratz promised that the proceeds of the tax would go towards a housing fund that would subsidise accommodation for the people of Pontresina. In the statement, she argued that the idea would go some way to solve the continued shortage of housing in the Alps, a region which has seen rental costs rise faster than the national average.

Pontresina becomes the first Swiss town to propose new housing tax

Her proposal is not without precedent either, with the Federal Supreme Court ruling in 2014 that local areas were allowed to introduce taxes on second homes. However, so far, no municipality in Switzerland has actually tried to implement a second home tax.

Naturally, the proposal has not gone down well with the “secondary residents” - a term used by locals to describe second homeowners - of Pontresina. One told Blick that they are “not responsible for the difficulties of the real estate market,” with another saying that a boycott of the Engadine could be on the cards if the tax is passed.

Second homebuyers already pay more, critics argue

It has also not been well received in the fox fur-coated capital of the Engadine, with St. Moritz president Christian Jott Jenny arguing that second homeowners already pay enough. Regarding the housing crisis, the head of the ski resort said that all communities had to “find a reasonable and fair way to resolve" the problem.

The idea that second homeowners already pay more for property is not without foundation. Since the passing of the Second Home Act in 2015 after a successful referendum, communities have had to limit the number of second homes they can offer to 20 percent of total housing stock (calculated by square meterage).

According to Blick, this has led to dramatic price differences. For instance, a property being sold as a first home in Flims, Canton Graubünden, cost 1,09 million francs. On a listing for a second home in the same town with only two square metres more floor space, the cost is 1,86 million. The phenomenon is not unique to the mountains either, with real estate expert Sascha Ginesta explaining that second homes are 30 percent more expensive than first homes on average.

Swiss housing will ultimately be solved by building more homes

For his part, Ginesta also found the second home tax to be lacking, arguing that it will only serve to bolster the municipality’s already stellar finances. He argued that even if the idea puts the affluent off from purchasing second homes, buying a house will remain unaffordable for most local residents.

He argued that fundamentally, the problem does not lie with a lack of money or even available homes to buy, “What is missing is rental accommodation. But we can't increase the number of rental properties overnight. These are long-term processes.”