Imputed rental value is going away – What changes?
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In September 2025, Swiss citizens voted for the removal of the imputed rental value. This will start from tax year 2029, as per the federal council. So, what will change when this reform takes effect?
In this article, we go into detail about the imputed rental value and its removal. Some of the consequences may not be expected. And there are even consequences for renters.
Imputed rental value
If you are a real estate owner, you will probably know what the imputed rental value is, but many people do not know this tax well.
The imputed rental value tax started in 1934 as a crisis tax levy during the Great Depression. It was then validated as a permanent tax in 1958. It is a tax on fictitious income. The idea is that homeowners get taxed on what they save on rent. So, even though they do not get any income from their home, they are still taxed as if they rented it out.
However, this also comes with deductions. Since homeowners are taxed on the imputed rental value (even though they have no income), they can also deduct the interest they pay to the bank. Additionally, they also can deduct maintenance costs and renovation costs for the house. If they have to change a water boiler, for instance, this can be deducted from the taxable income.
In practice, this tax increased taxes for people with low mortgages and low renovation costs. But it decreased taxes of people with high mortgages and high renovation costs.
In itself, this tax is not very complicated. The only complicated thing about it is that it was necessary to fill out a complete questionnaire when buying a new house. This questionnaire tried to assess the imputed rental value of the house based on the size, the location, and the quality of the house.
However, even though it was not complicated, its removal may have some significant consequences.
Removal of imputed rental value
On September 28th, 2025, Swiss citizens voted for the removal of the imputed rental value, with a strong majority of 57.7%. The object of the vote had a confusing name because it was called “cantonal tax on second homes” and did not mention imputed rental value. If you want to read the details from the confederation itself, you can check out the official reform page.
Originally, the enforcement date was not announced. But in April 2026, the federal coucil announced that this will start into effect in January first 2029.
So, starting from 2029, this tax will not be levied anymore. Until this point, nothing changes.
Changes
So, we will now cover the main changes that will happen when the tax ceases. As we will see, there are even some consequences for non-owners.
1. No more imputed rental value
The first obvious change is the removal of the imputed rental value. New homeowners will not have to fill out the questionnaire. And this fictitious income will not be added to the taxable income of property owners.
This will result in a net decrease in taxable income for every homeowner. But this is only one piece of the change.
2. Passive debt cannot be deducted (for renters too)
One major change is that homeowners will not be able to deduct the interest on their mortgage. Until now, the entire mortgage interest payments could be deducted from the taxable income.
Not being able to do that anymore will have some consequences. First, it makes repaying a mortgage more interesting than before. Before, repaying a mortgage meant that taxes would go up. Now, taxes will not move when repaying a mortgage. This will make indirect amortization significantly less interesting. We may see more people repaying their mortgages than before.
What many people do not know is that this change is broader than just homeowners. The change also means that renters cannot deduct interest on private passive debt. Until now, people could also deduct interest payments on personal loans, consumer loans, or Lombard loans. It is worth mentioning that this only concerns passive debt, that is, debt that is not tied to an income-generating asset.
Active debt (debt to buy an income-generating asset) remains deductible. Debt on income-generating assets could be a mortgage for a rental property. So, owners of rental properties can still deduct it. Another example would be a business loan.
With that change, some people will pay more taxes because they will not be able to deduct the debt payments. Lombard loans will likely become less interesting. And even car loans will become less interesting since one of their advantages was to be tax-deductible (compared to a lease, which is not).
So, this change is a net increase in taxes for every person with debt (except for rental properties).
3. Maintenance costs cannot be deducted
For most, the most impactful change is that maintenance costs cannot be deducted anymore. Until now, if somebody had to redo their roof, they could deduct that expense from their taxable income. This made a significant difference in taxes and was one of the most powerful Swiss tax deductions.
Renovations that added value to a house (like a pool) could not be deducted. However, renovations that increased the energy efficiency of a house could be deducted. For instance, replacing an oil heater with a heat pump could be deducted.
When the change goes into effect, no tax deduction will be possible for maintenance.
In my opinion, this change will make a very significant difference. The main issue is that energy-efficiency renovations will not be deductible anymore. I expect fewer renovations in that area to happen after the removal goes into force. Most people will not renovate their house for energy efficiency without a tax break. In a situation where reducing environmental impact is important, this change may have severe consequences.
These deductions remain possible for rental properties.
Overall, we can expect fewer renovations from homeowners when imputed rental value goes away.
Cantonal changes
Currently, all the chances from the removal of the imputed rental value apply at both federal and cantonal levels. Indeed, these are things that cantons are following from the federal deductions. In this case, the cantons follow the federal tax framework.
The federal council has stated that cantons can introduce new deductions on their own. This is one of the reasons for the transition period.
As of October 2025, we have no concrete information about cantonal changes. So, we must assume that currently all cantons will simply follow the federal changes. But things may change by the time the reform enters into force. I do expect some cantons to allow deductions for energy efficiency upgrades.
Exception for first-time owners
In the law update, there is an exception for first-time owners that can deduct the mortgage interest from their taxable income. It must be the first time they purchase a property, and this property must be a primary residence.
A married couple can deduct 10,000 CHF the first year. Then, this is reduced linearly over 10 years (9,000 CHF the second year, 8,000 CHF the third, and so on). An individual can deduct 5,000 CHF the first year. Then this is reduced linearly over 10 years (4,500 CHF the second year, 4,000 CHF the third, and so on). After 10 years, no more deduction is possible.
For eligibility, the purchase date will be considered. So, even people who bought before the reform could get some years of deduction. For instance, if the reform starts in 2029 and somebody bought in 2024, they will be able to deduct until 2034.
This is made to encourage first-time owners.
Before and after summary
We can make a quick comparison of the before and after situation.
| Subject | Before | After |
|---|---|---|
| Imputed rental value | Taxed as fictitious income; questionnaire on purchase | Removed |
| Mortgage interest | Deductible from taxable income | Generally not deductible (exception for first-time owners; rental properties) |
| Passive debt interest | Often deductible (subject to limits) | Not deductible (confirm scope; federal vs. cantonal rules) |
| Maintenance & renovations | Maintenance and energy-efficiency upgrades are deductible | Not deductible |
| First-time owner relief | N/A | Temporary deduction, linearly reduced over 10 years |
The transition period – Between now and 2029
The removal of imputed rental value has been voted on, but no change will come until 2029.
So, during the transition period, everything stays as such. However, since we know that things are going to change soon, it is good to be prepared and anticipate.
One thing that will likely make sense is to shift some renovation work earlier if they can fit it in during the transition period. Anything after the period will be less tax efficient. For instance, if you planned for solar panels in 2029, it would be safer to move that to 2027 or 2028 (if finances are possible).
It is also worth mentioning that cantons may introduce some deductions, but these deductions will only be at the cantonal and municipality levels. So, these deductions will be less efficient than before. And they all will be different for each canton.
Our strategy
We plan to renovate our house earlier than planned to get tax deductions and avoid some renovations later.
In 2025, we bought a house, and we have multiple renovation projects in the future. So for us, the removal of the imputed rental value means a change in strategy as well. We will probably cancel some of our projects if they cannot be deducted from taxes.
In the next five years, we were planning to put solar panels on our house. Given this change, solar panels will become a priority over everything else. Indeed, this is the most expensive planned renovation. And financially, it only makes sense with a tax deduction; otherwise, it will be too expensive.
Some of the renovation work we planned will be moved to 2027 as well. We will basically do more in 2027 than we planned in the next few years. And it is highly likely that we will cancel some of the most expensive renovations that we planned because they would only have made sense with the deduction.
We were also thinking about some insulation work, but I do not think we will do that at all. Changing the windows also does not make too much sense anymore.
Overall, for us, the removal of the imputed rental value means shifting some work earlier and canceling some other work that is planned for later.
Conclusion
Swiss citizens have decided to stop the levy of the imputed rental value. This change will come into effect in tax year 2029. At this time, the imputed rental value will not exist anymore. Additionally, passive interest will not be deductible either, just like renovations and energy-efficiency upgrades.
For some people, this will mean higher taxes, while others will profit with lower taxes. This mostly depends on the amount of renovation done and the amount of amortization already done.
On one hand, I am glad this complex and fictitious tax goes away. But on the other hand, I am worried about the state of renovations, especially about measures for energy efficiency, which we need.
If you would like to learn more, you can read about Swiss taxes in detail.
What about you? What do you think about this change?
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Hi Baptiste,
What do you think?
Using a Lombard loan will become more complex. In theory, you could borrow against your portfolio to buy additional shares, boost your income, and continue deducting the interest payments. But if you instead use the same Lombard loan (currently about 1.5% and “hassle” free) as a substitute for a SARON mortgage, then under future tax rules you would likely lose the ability to deduct the interest payments. Finally, your tax return would also need to clearly state whether the Lombard loan is being used for income generation or simply as passive debt.
Hi Tim
I agree. In theory, you could still use a Lombard loan to invest aggressively. And then this would be an income-generating (active) debt that you could deduct. But it’s going to be difficult for the tax office to distinguish them. I am not sure if we will be able to deduct Lombard loans in the future. This is likely going to make them less interesting.
Hi Baptiste.
In view of all the replies which bring new information – partly in need of verification and/or official sources – will you update the article and send an update to everyone so we can read it again?
TIA
Hi MixMax
I have already updated it with all new facts. Have I missed something?
I usually don’t send out the same article again by email to everybody so recently after another email.
Ok, thanks. I mean for the future, when/if new things will be understood/cleared…
I will keep updating it. If there is a major change, I will mention it in an email ;)
Hi Baptiste,
Thanks for another great article.
Just one comment. You are not mentioning changes related to wealth tax by having a mortgage for a house.
Best, Mitch
Hi mitch
As far as I know, there are no differences in wealth tax. Do you know otherwise?
Hi,
I got info that also deductions on wealth position in tax declaration (in an amount of mortgage) will not be possible anymore with a new law. This is quite big difference, especially for people having sufficient money for the house.
Best,
Mitch
Hi Mitch
Do you have a source for that? I had never heard that before. It would make a significant difference indeed.
Here it states that mortgage “Zinsen” won’t be deductible anymore if you own the place and haven’t rented it out:
https://www.lukb.ch/private/immobilienfinanzierung/ratgeber/eigenmietwert#title-lead-b0483f29-b73f-4bf7-8896-8bbdb8a28a59
Isn’t Zinsen the interest on the debt and not the debt itself? We will not be able to deduct the interest payments, but we should still be able (as far as I know) to deduct the debt value itself.
Thanks! That makes it clear as a first time buyer that I can at least deduct the mortgage interest for the remaining 7 years. Fair enough…
You are welcome, glad this article could help.
Many thanks for the article, very informative.
I was trying to learn about this topic, and found the articles during the “campaign/voting” period a bit confusing exactly for what you mentioned: was this tax related also for primary homes or only for the secondary ones.
I found a lot of contradictions on the news, and your article clarified most of them.
Just one question: do the second-homes have also the same Imputed rental value taxation currently, or it is taxed differently and if that also was on voting?
Hi Hugo
Thanks, I am glad I was able to clarify some points.
Yes, currently, primary and secondary residences are taxed the same way. After the reform, they will also be taxed in the same way (imputed rental value goes away, right to deductions disappears). But there is one significant difference: the federal law explicitly states that canton can levy extra taxes on secondary residences. At this point, we don’t know what cantons will do.
Thanks very much for the article — it was really informative.
I do have a question though: I live in Basel-Stadt and own a house that’s my only primary residence, but I rent out the top floor through Airbnb. I’ve lived here for about 15 years.
At the moment, the tax office calculates the imputed rental value for the part of the house I occupy, and I pay tax separately on the rental income after deducting costs such as utilities and maintenance.
With the new reform, I assume the imputed rental value will be removed — but will I still be able to deduct the costs related to the rented space in my home (for example, utilities, repairs, cleaning, etc.) when declaring that income?
Thanks, Amita.
I would say that the “rented part” will not change. If you renovate the Airbnb floor, you should be able to deduct it.
What will change is the part you live in. If you renovate that part, you won’t be able to deduct it anymore, and the imputed rental value should indeed disappear.
As far as I understand, you can still deduct renovations on property you rent out. Is this correct? What if you own a multi family home and redo the heating, would you be able to deduct 75% of the cost (in the case of 4 apartment, one of which you live in yourself)?
Hi Sui
Correct, a property that is rented out can still lead to deductions.
I believe your math is correct as long as the four apartments are the same size. It should be prorated, but I do not know exactly what needs to be taken into account for the prorata (rooms or square meters).
Hi.
Does this mean that if I leave my actual property, rent it out but still maintain ownership, I will be able to continue deducting renovations?
Yes. This reform applies to residences where you live, not rental properties.
So, if you now have a main residence which you own and deduct renovations and later rent it out instead, you will still be able to deduct the renovations even after the reform.
Great summary, as always. Thanks!
Two pieces of information that are not explicitly stated here that add some nuance:
– Maintenance & renovations are still deductible for properties that are rented out. The change only applies to self-occupied objects, so the common fear that missing deductibles will also be passed on to renters is false.
– Maintenance & renovations are no longer deductible from the federal tax but cantons are still free to allow them for ecological renovations and preservation efforts.
Hi Sven
Thanks for the feedback, I will make this more explicit.
Very good article, Baptiste.
Although I am planning to move to Switzerland (Ticino) in a few years upon retirement, one option for me would be to buy a second home there with the necessary permissions as a EU foreigner before moving to CH. I’m just wondering if, in this case, the second home tax would be worse than the imputed rental value tax….from a mathematical point of view, I guess it would be as it would aim to compensate for the loss of income for the tax authorities, unless they have some other means (increasing existing taxes or cutting back on public services and welfare) up their sleeves?
Hi max
A secondary residence is entirely different taxation indeed. Are you asking whether you should have your primary residence or secondary residence in Switzerland?
My plan A is to buy my primary residence in a few years time in CH when I retire. However I was considering a plan B and maybe buying a secondary residence in CH (while still having my primary residence in France) which would become my primary residence after retirement.
I’m just thinking that if I bought it first as a secondary residence, the new tax on secondary residences might be considerably higher than the current t tax on imputed rental value.
At first sight, I would think it’s better as a residential property, but you would have to do the math to be sure, including the difference in foreign taxes.
I think there is some nuance of who classifies as first time owners. Could you please add details on that as well?
Hi Amit
What kind of nuance are you talking about? It must be the first time they buy a property, and that property must be their primary residence. But I am not aware of any other nuance.
https://www.perplexity.ai/search/latest-imputed-rental-value-ch-ne7CWHzSS5u1xy7GhDGFlg#0
Apparently it is only applicable for first-time buyers who bought after the reform. I am not sure what exactly that means and if it is indeed the case.
I think not. From what I have seen, what matters is the date of purchase. So, people that bought before the reform but within the 10 years should be able to get the deduction.
Hello! Thanks for the article. I think the question is whether people who have already bought their first home are still considered as first-time buyers and will still benefit from the advantage of this will work only for those who will buy their first home after the reform takes place.
Good point, I have tried to make it clearer in the article. What should matter is the date of purchase, even if it’s before the reform. So, if you have bought your first property in the last 10 years when the reforms gets applied, you should get the deduction.
I hope so too! We bought this year, so it would suck if we couldn’t at least deduct some of the mortgage interest in the remaining years.
You will be good. I looked again at the official documentation (in french here). And they do confirm that people who bought before the reform will be able to deduct their mortgage interest payments for 10 years, starting from the purchase date.
Hi Baptiste,
Do you know that first time buy a property in Switzerland or globally? I do own property in my home country, but later on I plan to purchase one in CH. Does it count as a first time buy or not?
Thanks,
Daniel
Hi Daniel,
That’s a good question and I don’t know the answer :)
Looking at the official document, they mention “les contribuables qui achètent pour la première fois un logement en Suisse à titre de résidence principale”, which would translate to ” taxpayers who buy for the first time in Switzerland a primary residence”. So, this seems to indicate that your example would count as a first time buy, but you would have to check with the tax office to be sure.