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Swiss apartheid? Alpine real estate.

LOOKING FOR a low-tax environment to build your dream home? The Swiss canton of Obwalden has a deal for you. How does "a sunny location, with low noise emissions [and] good amenities," sound? They'll even throw in "an unrestricted view that cannot be built on" One catch: You have to be extremely wealthy.

Three years ago, Obwalden voted itself a 1.8 percent local income tax rate and a 6.6 percent corporate tax rate. Although the move attracted many businesses, virtually all merely acquired a mailing address in the canton and failed to bolster the local economy.

In Switzerland, known worldwide as a tax haven, cantons compete to create the friendliest tax environment, so raising taxes isn't a viable option. Instead, town fathers have decided to make previously restricted agricultural land available for construction. These "special living zones" which boast lake and mountain views, will be available only to the taxpaying rich or to people who can promise to create jobs in the region.

Not surprisingly, the plan has attracted criticism. "These special living zones are nothing less than a form of apartheid," Moritz Leuenberger, Switzerland's environment and transport minister, complained to the U.K. Guardian. Obwalden Finance Director Hans Wallimann offered this defense: "Swiss Railways offers a first class with more comfort and more space. There's also the second class where I have less space, but I pay half the amount. Is that so unfair?"

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Title Annotation:Citings
Author:Mangu-Ward, Katherine
Article Type:Brief article
Geographic Code:4EXSI
Date:Oct 1, 2009
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