Abolition of Imputed Rental Value 2029: Consequences for Owners and the Market
On September 28, 2025, the Swiss electorate voted 57.7 percent in favor of abolishing imputed rental value. The Federal Council has set the transition period to end in 2028 — the reform therefore takes effect on January 1, 2029. For homeowners, this is one of the most far-reaching tax changes in decades. Anyone who plans properly can benefit from the reform. Anyone who ignores it risks ending up in a worse position.
What Applied Until Now — and What's Changing
Until the end of 2028, homeowners pay tax on a notional rental value of their owner-occupied property as income. In exchange, debt interest and value-preserving maintenance costs may be deducted from taxes. As of January 1, 2029, both the taxation of the notional rental value and the deductibility of debt interest and maintenance will be eliminated — with the exception of energy-efficient renovations, which may remain deductible.
Who Wins, Who Loses?
Clear winners: owners with a low or fully paid-off mortgage. Today they pay tax on a rental value with barely any offsetting deductions. From 2029, this burden disappears — a meaningful gain in liquidity.
Clear losers at first glance: households with a high mortgage burden and significant renovation needs. They lose the debt interest and maintenance deduction, without which the notional rental value taxation was previously bearable. However, the effect on the tax bill depends heavily on individual circumstances.
Second homes: here, a cantonal property tax is being introduced in addition. The impact is economically significant particularly in the vacation cantons of Graubünden, Valais, and Ticino.
What to Do Before 2029
Owners should actively use the transition period. Three matters are in focus: first, the ratio of mortgage to equity — early amortization may become economically more attractive from 2029. Second, larger renovations that still qualify for tax benefits under today's deduction rules. Third, the strategic question of whether second homes should remain in the portfolio long-term.
What Does the Reform Mean for the Property Market?
In the medium term, the reform is likely to move the market in two directions. First, mortgage-free homes become more tax-attractive — which supports buyer interest in outright purchases. Second, adjustments are emerging in the second-home market, because the property tax in vacation regions can make holding second properties more expensive.
FAQ
Related Topics
Personal Consultation
Would you like a personal consultation? Our experts in Zurich and Zug will advise you free of charge and without obligation on your individual situation. Fair, transparent, and personal — since 2017. Book an appointment · [email protected]
