Abolition of the imputed rental value: what this means for homeowners

A major change in property taxation

Becoming a homeowner in Switzerland involves taxation on both income and wealth, depending on the canton where the property is located. The tax value of the property is included in your taxable assets.

For decades, homeowners occupying their own property have been required to declare an imputed rental value, meaning a fictitious income based on the rent they could receive if the property were leased.

This mechanism was originally introduced to ensure a degree of tax fairness between tenants and homeowners.

A reform now approved

The abolition of the imputed rental value was approved by Swiss voters in the referendum of 28 September 2025.

This decision represents a fundamental shift in the Swiss tax system for owner‑occupied housing.

However, the reform will not take effect immediately:

• a transition period is planned,

• current rules remain in place until implementation,

• the new system is expected to come into force in the coming years, once cantonal laws are adapted.

How the current system works

Today, the system is based on a balance between:

Taxation:

• imputed rental value added to taxable income

Deductions:

• mortgage interest

• maintenance and renovation costs

What will change with the reform

The reform introduces a major shift in the taxation approach.

End of the imputed rental value

Homeowners will no longer be required to declare a notional rental income for owner‑occupied properties.

Reduction of tax deductions

In exchange:

• mortgage interest will generally no longer be tax‑deductible for owner‑occupied properties,

• maintenance and renovation costs will, in principle, no longer be deductible at federal level,

• deductions for energy‑efficiency measures will also be restricted.

Some differences may remain depending on cantonal decisions.

Specific cases

• For rental properties: certain deductions may remain applicable

• For first‑time buyers: a transitional regime may allow limited interest deductions over a defined period

What this means for homeowners

The reform will not affect all homeowners in the same way.

Highly leveraged homeowners

• loss of interest deductions

• potentially higher tax burden

Low‑debt or debt‑free homeowners

• no more imputed rental value

• potential tax relief

Renovation and maintenance

After implementation, renovation and energy-efficiency work may become:

• less attractive from a tax perspective,

• encouraging homeowners to anticipate such investments during the transition period.

Anticipating the transition period

Until the reform comes into force, the current system continues to apply.

Depending on individual circumstances, it may therefore be relevant to:

• anticipate renovation or maintenance work,

• review financing structures,

• integrate these changes into a broader financial strategy.

A shift to consider within a broader strategy

Beyond property taxation, the reform increases the importance of other optimisation tools, such as:

• pension buy‑ins (second pillar contributions),

• pillar 3a contributions,

which remain effective ways to reduce taxable income while strengthening long‑term financial security.