For years, it has been the “ghost at the table” in the tax returns of Swiss homeowners. We are talking about imputed rental value, a tax on a fictitious income that is now heading toward a historic abolition.
This reform represents a true revolution for homeowners. However, every medal has its reverse side: while a tax disappears, the rules for deductions are changing radically.
What will happen in 2029?
The new system will officially come into force in 2028, although a transition period (yet to be defined) is planned. It is important to note that until then, the current tax provisions will continue to apply.
The Tax “Trade-off”
The elimination of taxation on fictitious income is not a condition-free gift. As a direct trade-off:
- Maintenance costs will no longer be deductible.
- The deductibility of mortgage interest in its current form will be eliminated.
However, the legislator has provided some exceptions. It will still be possible to deduct mortgage interest for primary residences in specific cases, though only to a limited extent for ten years. Income-producing properties will also retain the ability to deduct such interest.
Who wins and who loses with the reform?
The reform aims to simplify the tax system, but the impact on your wallet will vary significantly from owner to owner.
|
Owner Profile |
Expected Impact |
|
High mortgage |
May be penalized by the loss of significant interest deductions. |
|
Low or no mortgage |
Will benefit most from the elimination of the imputed rental value tax. |
Furthermore, Cantons will maintain a certain level of autonomy: it will be up to them to decide whether or not to introduce “optional provisions”.
Strategy and Planning: Don’t be caught unprepared
In a changing landscape, standing still is a risk. This radical shift requires re-evaluating actions such as amortizations, renovations, or sales with particular attention. Decisions such as purchasing a home, maintenance interventions, or inheritance transfers must now be assessed from a new perspective.
Beyond purely fiscal aspects, analysis of the following remains fundamental:
- Pension planning.
- Matrimonial and succession law.
- Present and future family budgets.
- Investment returns.
Expert Advice: In-depth planning of financial and insurance aspects is the only way to make the most suitable decisions based on your family situation and goals.
How can BIG Brokers help you?
At BIG Brokers, we are by your side to navigate this transition, leveraging our insurance expertise, partnerships, and cross-border experience.
Do not wait until 2029 to understand what you will pay. Contact us today to schedule an appointment and plan your real estate future.
FAQ – Swiss Real Estate Taxation
When will the rental value officially disappear?
Entry into force is expected in 2029, preceded by a transition period yet to be defined.
Will I still be able to deduct renovation costs?
Under the new system, maintenance and renovation costs will no longer be deductible as a trade-off for the abolition of the rental value.
What happens to mortgage interest?
Generally, it will no longer be deductible, except for income properties and, for a limited 10-year period, primary residences.
Is the reform the same across Switzerland?
While the guidelines are federal, Cantons have the autonomy to decide on optional provisions.
Should I sell my house before the reform?
This depends on your specific situation, debt level, and goals; a professional evaluation is essential.
