The political discussions about the budget are absurd.

Each month, we interview different sectors and professions about specific topics.

For this November, we went to knock on the doors of developers and large real estate groups to get their point of view on a topic that is particularly sensitive these days in Bern: that of subsidies intended for the renovation of buildings.

Responses from Christophe Aumeunier, Secretary General of the Geneva Real Estate Chamber (CGI)

A group of experts appointed by the Federal Council proposes to drastically reduce subsidies for building renovation. How do you view this idea?

I doubt that any real estate professional sits on this group of experts. That is more than regrettable since the Confederation repeatedly states that the built real estate stock generates 40% of carbon emissions. It is therefore urgent that the Federal Council surround itself with expertise to better grasp the situation and appreciate the full relevance of subsidies.

Their reduction will bring a halt to a virtuous movement which, honestly, has only just begun. And there is no worse economic policy than "stop and go".

And let’s be clear: restricting subsidies or tax deductions in this area runs counter to the statements and commitments made on climate. It’s as simple as that.

The experts argue that most solutions for retrofitting are already profitable and that, in that case, subsidies no longer make sense. Does this argument seem valid to you?

This claim is partially true. While it can be defended, for example, for solar panels, it is not yet established for heat pumps. For the most expensive work—namely work on the building envelope—their argument is completely false. Take the Geneva building stock alone: it will need investments amounting to more than 4 billion francs to reach the targeted objectives.

Subsidies are all the more indispensable because the usual investment rhythm in real estate—30 years for façades and roofs—has been broken today. The climate transition is disruptive and the real estate sector cannot absorb such a colossal and rapid volume of investment.

Subsidies are all the more indispensable because the usual investment rhythm in real estate - 30 years for façades and roofs - has been broken today.

Without these subsidies, should we fear a sharp rise in the bill for tenants?

Yes, clearly. Subsidies cannot be passed on to rents. Without them, owners such as pension funds, which must generate returns to pay pensions, will have no choice but to increase rents.

Could this jeopardize Switzerland’s 2050 carbon neutrality goals?

It’s obvious. Work simply will not be carried out. Threats and potential fines won’t change that. If the capital to invest cannot be found, the work will not be done.

As property owners, what other obstacles remain to achieving this carbon neutrality?

Political discussions around the federal budget are absurd. Bern seems to have lost its mind. The question of abolishing tax deductions allowed for energy-saving work, discussed in the context of removing the imputed rental value, is particularly counterproductive.

The decisions taken so far to support an assertive climate policy, with tax deductions and subsidies, were appropriate. Changing the rules just as the works are barely starting will break this virtuous Swiss edifice.

If the removal of these deductions were decided, we can expect an immediate slowdown in works related to our climate commitments and for the construction sector to fall into an economic crisis.

The decisions taken so far to support a proactive climate policy, with tax deductions and subsidies, were adequate. They offered a sharing of the financial burden on the owner, first and foremost, but also on the tenant and the state. Changing the rules just as the works are barely starting will break this virtuous Swiss edifice. We have much better things to do in Switzerland!

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