Second homes: What it means for your taxes

Abolition of the imputed rental value: what it will change for property owners starting in 2028

The taxation of a secondary residence in Switzerland, as with a primary residence, is based on the tax system of the canton where the property is located. The tax value of the property continues to be included in the owner’s taxable wealth.

For nearly a century, owners of secondary residences have also been required to declare an imputed rental value, meaning a theoretical rent considered as taxable income.

Until now, several deductions have been possible:

• deductions for mortgage interest;

• deductions for maintenance and renovation costs;

• the possibility, in some cantons, to deduct depreciation when the property is rented out (maintenance expenses).

However, this will change with the reform, which is expected to come into force in 2028 at the earliest.

Nevertheless, the implementation of this reform is still subject to debate among the cantons, particularly in mountain regions. The Swiss majority has approved the abolition of the imputed rental value for 2028, but alpine cantons consider this timeline too rapid, notably due to estimated tax losses of nearly CHF 277 million for primary and secondary residences. They are requesting a postponement to 2030 to allow time to introduce a new property-based tax intended to compensate for these losses, although its implementation remains legally and politically complex. A federal decision is expected before summer and could either confirm or postpone the deadline.

However, the vote of September 28, 2025, confirmed the abolition of the imputed rental value for all owner-occupied homes, including secondary residences, and introduces changes to the deductibility rules for rental properties.

The direct impacts on several tax mechanisms are as follows:

• No more imputed rental value to declare: Owners of secondary residences will no longer have to declare fictitious income used for private purposes.

• End of mortgage interest deductibility: Mortgage interest will no longer be deductible for secondary residences used for private purposes.

• For rental properties: Mortgage interest proportional to the ratio between the value of the rented property and the taxpayer’s total wealth will remain deductible.

• End of deductions for maintenance, renovation, and energy-efficiency expenses: At the federal level, these deductions will disappear. Cantons may retain certain targeted deductions, particularly for energy improvements, but this will depend on local decisions. Maintenance costs for rental properties will remain deductible.

• Possible introduction of a special tax on secondary residences: This is one of the most important aspects of the reform. Cantons will have the option to introduce a new special property tax on secondary residences to offset for the loss resulting from the abolition of the imputed rental value.

  This new special tax on secondary residences:

• • Is not mandatory: each canton will decide whether to introduce it;

  • Has no defined rate or framework yet and will vary by canton;

  • Could particularly affect tourist cantons (Valais, Graubünden, Ticino), which have expressed concerns;

• • Could delay the full implementation of the reform.
    
    

Practical consequences for property owners

The reform will result in a significant loss of tax advantages:

• Renovation and energy-efficiency improvements will become much less attractive from a tax perspective once the reform comes into force;

• Highly leveraged owners will be disadvantaged, as the abolition of the imputed rental value may not compensate for the loss of mortgage interest deductibility;

• Owners with low or no debt may benefit from tax relief, as they will no longer have to declare an imputed rental value and will be only marginally affected by the loss of mortgage interest deductibility.

   

If you are considering renovations, energy upgrades, or renewing your mortgage, it may be fiscally advantageous to complete these steps before 2028, while current deductions are still in force.

This also means that starting in 2028, when property-related deductions may disappear, voluntary buy-ins into the second pillar and contributions to pillar 3a will become key tax optimization tools to reduce your taxable income while strengthening your long-term financial security.

To preserve your financial balance, it is essential to understand how these taxes work and how your secondary residence influences the amount you owe.