Taxes and flat ownership – keeping on top of things
Imputed rental value, maintenance deductions, renovation funds: anyone who owns a flat faces specific issues when completing their tax return. We explain which costs you can deduct and what you need to bear in mind.
A new year, a new tax return – and that applies to flat ownership too. This particular form of ownership, introduced in Switzerland in 1965, has made the dream of owning a home a reality for many households across the country. When it comes to tax, this popular form of home ownership is, in principle, treated in the same way as other forms of property ownership. The imputed rental value of an owner-occupied flat is taxed as income. In addition, the official tax value, including the land share, counts towards your assets. Tax deductions provide some relief, at least until the end of the 2027 tax year. This is because the abolition of the imputed rental value, decided in autumn 2025, could come into effect as early as 2028 – marking a change in the system of taxation for home ownership. Until then, the following rules apply.
Maintenance costs: deductible only if they preserve the property’s value
Costs relating to the maintenance of the flat to preserve its value are deductible. These include expenditure that maintains the flat’s current condition, such as painting, the replacement of household appliances, equivalent floor coverings or minor repairs. Condominium owners can choose between a flat-rate deduction and a deduction based on actual costs. For minor work, the flat-rate deduction is often worthwhile; for larger renovations, it is better to claim the actual costs with supporting documents. However, investments that increase the property’s value, such as a new swimming pool, the installation of a sauna or a conservatory, are not tax-deductible.
Energy efficiency: a tax exception
Investments in energy saving constitute an exception for tax purposes: measures such as thermal insulation, heat pumps or solar panels are generally fully tax-deductible, even if they increase the value of the property. However, in the case of flat ownership, such investments affecting the entire property require the consent of the owners’ association.
Renovation fund: contributions regulated differently by canton
The renovation fund, which is standard in flat ownership, is used to finance major refurbishments to the common property. Whether contributions to the renovation fund are tax-deductible depends on cantonal regulations. In the canton of Bern, for example, contributions to the renovation fund are generally tax-deductible, provided they are paid in and are subsequently shown as such in the owners’ association’s accounts. Maintenance costs charged to this renovation fund cannot then be claimed as a deduction a second time. Furthermore, such a renovation fund must be set out in a set of regulations, and the funds may only be used to cover repair and maintenance costs for the communal facilities.
The funds accumulated in the renovation fund must be declared as assets by flat owners on a pro rata basis according to their share of the property’s value until they are utilised. The share of the gross return on the renovation fund is taxable as interest (income).
Further deductions – and capital gains tax
Mortgage interest and building insurance premiums are tax-deductible. Administration costs – such as those for an external property management company or an audit firm – may also be claimed on a pro rata basis. When a flat is sold, the share in the renovation fund is transferred on a tax-neutral basis. However, the capital gain on the sale is subject to cantonal capital gains tax, the rate of which depends on the length of ownership and the amount of the gain.
Real estate, financial and mortgage expertise from a single source
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 through the sale of a property – providing a personalised service that meets the highest quality 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.