Goodbye to imputed rental value – what does this mean for homeowners?
The abolition of imputed rental value marks a systemic change in the taxation of home ownership in Switzerland. This opens up the potential for tax relief for homeowners – but it is important to consider individual circumstances.
Until now, anyone who owned a property and lived in it themselves was treated, for tax purposes, as if they were receiving rent for it – and this so-called imputed rental value was taxed as income. At the same time, homeowners were generally able to deduct mortgage interest, maintenance and investment costs from their taxable income. However, this tax structure is now undergoing a fundamental change. At the end of September 2025, voters decided by a clear majority that the imputed rental value would be abolished; however, this will not come into effect until 2028 at the earliest. What does this change in the system mean for homeowners?
An overview of the key changes
In general:
- The abolition of the notional rental value will reduce the taxable income of homeowners. This means they may be able to save on tax in certain circumstances.
- Maintenance costs and renovation work will no longer be tax-deductible at either federal or cantonal level. Taxes will therefore be higher in this respect.
- Investments in energy-saving measures can no longer be deducted for federal tax purposes. The cantons have the option of continuing to grant deductions for energy-saving and environmental protection measures until 2050 at the latest.
- Tax deductions for interest on private mortgages for owner-occupied properties will no longer be possible in future.
- An exception applies to first-time buyers of a property used exclusively as their own home: they may claim a limited mortgage interest deduction for ten years. In the first year, the deduction amounts to 10,000 Swiss francs for married couples and 5,000 Swiss francs for single people. Thereafter, this amount decreases by 10 per cent annually.
- Regional differences are becoming more significant: as the cantons are being given discretion – for example, regarding the introduction of a tax on second homes – regulations may vary considerably from canton to canton.
The extent to which individuals are affected by the change in the system depends on their individual circumstances. One factor that will certainly come into play is that mortgages can no longer be used for tax optimisation. It will tend to become less attractive to take out the highest possible mortgage, as mortgage interest can no longer be deducted from tax. To reduce the interest burden, buyers are likely to shift towards contributing as much equity as possible and repaying the mortgage more quickly.
Who stands to benefit as existing homeowners?
The impact on people who already own a property varies greatly. The main beneficiaries are likely to be older people who, after decades in their own home, have largely paid off their mortgage. They will be able to make significant tax savings in future. Conversely, it will become more expensive, particularly for owners of properties in need of refurbishment. This is because they will no longer be able to claim tax relief on renovation and replacement costs.
Make the most of the transition period
Anyone who has the financial means to do so before the system change – which will be introduced in 2028 at the earliest – should make the most of this transition period to carry out refurbishments and renovations on their home. After that, as mentioned, these investments will no longer be tax-deductible. “The market value of properties in need of extensive renovation is likely to fall, as potential buyers will have to factor in the fact that they will no longer be able to claim the resulting investment costs against their taxes,” says Thomas Graf, an experienced estate agent from Bern. Property financing should also be reviewed, along with whether larger capital repayments are possible before the new system comes into force.
Comprehensive expertise in property, finance and mortgages
The experienced property team at thomasgraf ag will be happy to advise you personally on the various aspects of home ownership – whether it be a flat or a detached house. This established property service provider also offers an exciting selection of attractive properties for sale in both categories. thomasgraf ag is a certified member of the Swiss Chamber of Estate Agents (SMK) and will also support you in the sale of a property – providing a personalised service to the highest standards. Thanks to thomasgraf ag’s close cooperation with the asset manager and family office service provider TRIONINVEST, as well as the financial services provider hypolino ag, we offer you combined property-specific and financial expertise, many years of industry experience and a strong network.