Deductible works and the abolition of imputed rental value

The recent federal referendum approving the abolition of imputed rental value marks a major change for property owners in Switzerland. While the reform aims to simplify taxation, it will have a direct impact on tax deductions, particularly those related to maintenance works.

A brief reminder: what is imputed rental value?

Imputed rental value is a notional income taxed on owner-occupiers, a mechanism that has long been considered complex and controversial. Its original purpose was to ensure equal tax treatment between tenants and homeowners. Over time, however, the system has become increasingly complex and less aligned with international tax practices.

What is still possible today (until 2028)

Until the reform comes into force, homeowners may still deduct:

• Maintenance and renovation costs
• Administration and property management fees
• Operating expenses (property taxes, insurance, charges)
• Energy-efficiency improvements
• Mortgage interest

These deductions currently make it possible to offset all or part of the taxable imputed rental value, thereby significantly limiting the tax impact.

What will change with the abolition of imputed rental value

Once the reform is implemented:

• Imputed rental value will be abolished
• Deductions for maintenance and renovation works will no longer be allowed
• Mortgage interest will no longer be deductible for owner-occupiers, except for first-time buyers, who will benefit from a transitional deduction for ten years following acquisition
• Certain cantons may retain targeted deductions, particularly for energy-related investments

Owners of income-generating properties will be less affected, as deductions will continue to apply to actual rental income.

Why it is crucial to plan ahead

Renovation, maintenance and energy-efficiency works remain fiscally advantageous as long as the reform has not yet entered into force. Strategic planning makes it possible to optimise these benefits before they disappear.

Our advice

Plan major works before 2028 to maximise your tax savings.

Close coordination between taxation, construction works and financing is now essential.

Do not hesitate to contact your advisor to discuss your situation.