#1. Legislative History

N. 1 Art. 108 Cst. continues the long tradition of housing development promotion in Switzerland. The article is based on Art. 34sexies of the former Constitution (inserted in 1972), which in turn goes back to Art. 34quinquies of the former Constitution (1947) (BBl 1997 I 1, 339). The original constitutional basis of 1947 arose in the post-war period as a reaction to the acute housing shortage.

N. 2 The Federal Council message on the new Federal Constitution emphasises the continuity of federal housing development promotion: «The promotion of residential construction and home ownership have been federal tasks since 1972 and 1947 respectively» (BBl 1997 I 339). During the total revision of 1999, the provision was adopted unchanged in substance, but linguistically modernised and systematically reorganised.

N. 3 The historical development shows three phases: The emergency law phase (1936-1947) with direct federal interventions, the stabilisation phase (1947-1972) with initial constitutional foundations, and the modern phase since 1972 with comprehensive promotion powers including ownership promotion.

#2. Systematic Classification

N. 4 Art. 108 Cst. is located in Title 3 «Confederation, Cantons and Communes», Chapter 2 «Powers», Section 8 «Housing, Work, Social Security and Health». The provision forms, together with Art. 109 Cst. (tenancy law), the constitutional foundation of the Confederation's housing policy.

N. 5 The norm has close cross-references to various constitutional provisions: → Art. 41 para. 1 lit. e Cst. (social objective of housing), → Art. 75 Cst. (spatial planning), → Art. 111 and 113 Cst. (occupational benefits for home ownership promotion) as well as → Art. 127 para. 2 Cst. (tax promotion measures). These systematic connections show the multi-layered nature of housing policy.

N. 6 In contrast to Art. 41 para. 1 lit. e Cst., which formulates a non-justiciable social objective, Art. 108 Cst. establishes a genuine federal power with corresponding obligations to act. The norm is conceived as a promotion mandate, not as a fundamental right or subjective entitlement (BGE 148 I 210 E. 4.4.6).

#3. Elements of the Offence / Content of the Norm

#3.1 Promotion Obligation (Para. 1)

N. 7 The term «promotes» implies an active obligation to act by the Confederation, but gives it considerable scope for action. Promotion takes place primarily through financial incentives, guarantees, loans and tax benefits.

N. 8 Promotion comprises three areas: First, residential construction as such, regardless of the form of ownership. Second, the acquisition of residential and house ownership, whereby the restriction to «personal use by private individuals» is central – second homes and investment properties do not fall under this (BGE 132 I 157 E. 3.3). Third, the activities of carriers and organisations of non-profit residential construction, which refers to cooperatives and foundations.

#3.2 Specific Promotion Instruments (Para. 2)

N. 9 The exemplary enumeration («in particular») mentions four main instruments: The procurement and development of land refers to active land policy and building land provision. The rationalisation of residential construction comprises technical and organisational improvements. The reduction of residential construction costs aims at cost reduction during construction. The reduction of housing costs concerns ongoing costs for residents.

N. 10 The promotion instruments range from research funding through pilot projects to direct financial assistance. Home ownership promotion using occupational benefits funds (Art. 30c ff. BVG) represents an important instrument, as do tax measures regarding deemed rental value (BGE 148 I 210 E. 4.4.6).

#3.3 Regulatory Power (Para. 3)

N. 11 The optional legislative power («may enact regulations») is limited to two areas: land development and construction rationalisation. This power is subsidiary to cantonal regulations and must respect the spatial planning sovereignty of the cantons (→ Art. 75 Cst.). The Confederation has so far made restrained use of this power.

#3.4 Special Target Groups (Para. 4)

N. 12 The obligation to consider («in particular») families, the elderly, the needy and the disabled concretises the concept of the social state. These groups are to be given priority treatment in all promotion measures, without other groups of persons being excluded.

#4. Legal Consequences

N. 13 Art. 108 Cst. primarily establishes a legislative and promotion mandate for the Confederation. Direct subjective rights cannot be derived from the norm. Implementation takes place through special laws such as the Housing Development Act (WFG) and the Home Ownership Promotion Act (WEG).

N. 14 The promotion obligation is not absolute, but is subject to the proviso of available resources and competing state tasks. The Confederation has considerable discretionary scope in choosing and designing promotion instruments (BGE 108 Ib 150 E. 4).

N. 15 Art. 108 Cst. does not create any direct obligation for the cantons, but they must implement federal promotion measures and may not counteract them. Cantonal housing development promotion remains permissible and desirable (→ Art. 46 Cst.).

#5. Disputes

N. 16 Scope of the personal use clause: Cardinaux advocates a narrow interpretation of «personal use by private individuals», whereby only primary residences are covered. Other authors argue for a more generous interpretation that also includes rented condominiums as future old-age provision. The Federal Supreme Court has decided in favour of the narrow interpretation (BGE 132 I 157).

N. 17 Relationship to Art. 41 Cst.: It is disputed whether Art. 108 Cst., beyond the mere promotion mandate, also contains a guarantee obligation for adequate housing. The prevailing doctrine (Rhinow/Schefer/Uebersax, Schweizerisches Verfassungsrecht, 3rd ed. 2016, § 51 N. 3625) denies this and refers to the clear separation between social objectives and competence norms.

N. 18 Extent of tax promotion: The extent to which Art. 108 Cst. justifies tax privileges for home ownership is controversially discussed. While some authors view extensive deduction possibilities as constitutional, others urge restraint with regard to tax fairness (→ Art. 127 Cst.).

#6. Practical Guidance

N. 19 When applying for housing development promotion, the detailed guidelines of the Federal Office for Housing (BWO) must be observed. These have de facto binding character and are used by the courts as authoritative interpretive aids (B-696/2022).

N. 20 The early withdrawal option for home ownership from occupational benefits (Art. 30c BVG) represents the most important promotion measure for many persons. The strict purpose restrictions and repayment obligations upon disposal must be observed.

N. 21 Non-profit housing developers can benefit from various forms of promotion, but must permanently comply with the non-profit criteria (cost rent, allocation regulations, profit distribution prohibition). Violations lead to recovery of promotion funds (BGE 108 Ib 150).

N. 22 The cantonal differences in housing development promotion are considerable. Before starting a project, cantonal and municipal promotion possibilities should be clarified in addition to federal programmes, as these can often be claimed cumulatively.

Art. 108 Cst. has played only a limited independent role in the case law of the Federal Supreme Court. The provision is primarily used as a constitutional basis for tax incentives as well as for the implementation of federal housing promotion legislation.

#Tax-Related Promotion of Home Ownership

BGE 148 I 210 (21 December 2021) Consid. 4.4.6: Constitutional basis for tax benefits for home ownership The lower limit of 60 percent for the harmonised rental value is constitutionally permissible:

«Grund für die tiefere Bewertung des Eigenmietwerts sind namentlich die geringe Verfügbarkeit des Grundeigentums, was zu spekulativen Rechtsgeschäften führen kann, allem voran aber das aus Art. 108 Abs. 1 BV hergeleitete Ziel, die Selbstvorsorge durch Bildung von Wohneigentum steuerlich zu fördern.»

The decision shows that Art. 108 Cst. provides constitutional legitimation for tax benefits regarding rental value, but not for excessive deviations from market value in wealth tax assessment.

BGE 133 I 206 (1 June 2007) Consid. 11.2: Promotion of home ownership as a constitutionally legitimate purpose The Federal Supreme Court confirmed that constitutional promotion of home ownership under Art. 108 para. 1 Cst. can justify degressive tax rates insofar as they serve to promote home ownership.

BGE 132 I 157 (12 April 2006) Consid. 3.3: Differentiation regarding rental values Different tax treatment of primary and secondary residences regarding rental value is permissible, as Art. 108 Cst. primarily aims to promote owner-occupied housing.

#Historical Housing Promotion

BGE 110 Ib 268 (14 September 1984) Consid. 2 and 3: Federal guarantees in social housing construction Claims arising from federal guarantees for second mortgages under the Housing Promotion Act of 19 March 1965 require compliance with legal requirements:

«Im vorliegenden Fall führt der Beschwerdeführer an, der Baukredit sei nur unter der besonderen Bedingung eröffnet worden, dass sich der Bund für die II. Hypothek im Betrage von Fr. 3 Mio. verbürge, was denn auch durch Verfügung des BWO vom 13. Dezember 1974 geschehen sei.»

BGE 108 Ib 150 (7 May 1982) Consid. 4: Limitation of reimbursement claims Claims for reimbursement of housing promotion contributions are time-barred one year after becoming aware of the legal basis and at the latest ten years after the claim arose. The limitation period begins when promoted housing is diverted from its intended purpose.

#Non-Profit Housing Construction and Tax Exemption

BGE 114 Ib 277 (28 October 1988) Consid. 2: Requirements for tax exemption A foundation for affordable housing construction may be granted tax exemption if its activity goes beyond mere non-profit operation and pursues socially particularly worthy purposes.

BGE 117 II 586 (23 December 1991) Consid. 3: Mortgage lending limit for housing cooperatives The mortgage lending limit does not apply to real property of housing cooperatives that provide housing to cooperative members for permanent residence.

#Administrative Enforcement

BGE 129 II 125 (3 December 2002) Consid. 2.5 and 2.6: Procedure for housing promotion Recovery of overpaid benefits in housing promotion follows administrative procedure. The review procedure must be concluded by declaratory ruling.

#Federal Administrative Court Practice

Recent case law of the Federal Administrative Court shows continuous application of housing and property promotion laws, with guidance notes from the Federal Office for Housing serving as binding administrative directives (B-696/2022 of 17 January 2023).

#Developmental Trends

Case law shows that Art. 108 Cst. functions primarily as an enabling provision for legislative measures, but rarely establishes direct legal claims. Tax incentive measures are subject to the requirement of proportionality and may not lead to privileges that contradict the system.