"If the Federal Council is now considering abolishing the program — or at least withdrawing the federal contribution — it is mainly because of the windfall effects it generates," explains Philippe Thalmann, professor of environmental economics at EPFL.
The threat is now more present than ever. The Buildings Program (PB), created in 2010 by Parliament in collaboration with the cantons, could be a casualty of the new cost-cutting policy in Bern.
Before explaining the cause, let us recall its origin with a brief historical overview. After introducing, in 2008, an incentive tax on the CO₂ emitted when burning oil or gas to heat buildings, Parliament found that this measure would not work in the rental sector. Indeed, if tenants pay this tax, they do not have the possibility to decide on the energy renovation of their building. That is why, fifteen years ago, financed by one-third of the revenues from the CO₂ tax, a program to support energy renovation for landlords was created: the Buildings Program (PB).
To obtain a parliamentary majority when it was adopted, it was nevertheless necessary to broaden the circle of beneficiaries to include "owner-occupiers", even though this extension was not justified in light of the original objective. The incentive provided by the CO₂ tax already works perfectly for them. Moreover, those advocating the abolition of the taxation of imputed rental value repeatedly said during the campaign that owners had every reason to maintain their property, even without a tax incentive.
If the Federal Council is now considering eliminating the program — or at least withdrawing the federal contribution — it is mainly because of the windfall effects it generates, that is to say the uncontested fact that a significant portion of beneficiaries would have carried out the work even without public aid.
With the addition of owner-occupiers, this windfall effect was effectively built into the DNA of the PB. In the most recent survey conducted in 2023 among its beneficiaries, 49% of them admitted that they would have undertaken the subsidized work even in the absence of financial support.
At the start of the program, these rates were considerably higher. They have, however, tended to decline as the owners most inclined to renovate their buildings have already done so, although these figures also depend on cyclical factors. Unfortunately, the survey carried out for the Federal Office of Energy (OFEN) makes no distinction between landlords and owner-occupiers, who should never have benefited from the PB.
The Federal Audit Office, which also examined the PB in 2024, noted that a large portion of the subsidies was devoted to replacing heating systems with renewable installations (41% in 2023 and 43% in 2024), whereas in most cantons this approach is already virtually unavoidable.
It did not, however, recommend abandoning the PB, but rather better targeting the aid towards the owners who truly need it and for measures that are not already required by cantonal regulations. Recommendations that were not followed by the Federal Council, which appears ready to throw the PB out with the bathwater in order to recover some 400 million Swiss francs per year from the CO₂ tax.
Yet, despite its flaws, the Buildings Program, in addition to cantonal regulations and the CO₂ tax, enabled the building sector to contribute half of Switzerland’s greenhouse gas emission reductions between 1990 and 2023, while it represented only about 30% of these emissions in 1990. Despite these significant advances, the hardest part remains to ensure that the entire building stock stops emitting CO₂ by 2050.
It therefore seems necessary to me to preserve the Buildings Program by refocusing it, as originally intended, solely on landlords and exclusively for energy renovation measures that are not already imposed by cantonal legislation. Action must be taken quickly: owner-occupiers are already rushing to carry out renovation works while they remain tax-deductible from taxable income — and subsidized by the program.
For it would be doubly punitive for landlords and their tenants if owners exhausted the program’s funds and then also benefited from the tax exemption on the imputed rental income derived from their renovated property.
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