If you own a home in Switzerland, or plan to buy one, one of the biggest property-tax changes in decades is coming.
For many years, homeowners in Switzerland have had to pay tax on a fictitious income from their own home: the imputed rental value (in German: Eigenmietwert). In simple terms, the tax system treated living in your own property as if you were receiving rental income from yourself. This system will end from 2029.
But the reform is not a simple tax cut. Where the imputed rental value disappears, several deductions disappear as well. That is why the impact depends strongly on your mortgage level, renovation plans, canton, property type and long-term financial strategy. For the more complex cases, see our related article on the biggest tax gray areas for Swiss property owners from 2029.
The new tax landscape at a glance
The new rules mainly affect owner-occupied residential property, including primary residences and self-used second homes. Rented or leased properties remain different: rental income continues to be taxable, and related deductions remain possible.
| Tax component | After 1 January 2029 |
|---|---|
| Imputed rental value | Abolished for owner-occupied primary and secondary residences |
| Maintenance costs for self-used property | No longer deductible at federal, cantonal and municipal level |
| Maintenance costs for rented or leased property | Remain deductible |
| Mortgage and private debt interest | Strongly restricted; generally only deductible in proportion to rented or leased real estate, plus a limited first-time buyer deduction |
| Energy-saving and environmental investments | No longer deductible for direct federal tax; cantons may continue such deductions until 2050 |
| Historic preservation costs | Still possible at federal level; cantonal treatment depends on the canton |
| Self-used second homes | No imputed rental value, but cantons may introduce a special property tax |
Who is likely to benefit?
The main winners are likely to be homeowners with low mortgage debt, few planned renovations and modern properties. This often includes long-term owners or pensioners who have already amortised a large part of their mortgage. They currently pay tax on the imputed rental value but may have only limited interest or maintenance deductions. Once the imputed rental value disappears, their taxable income may fall.
This is also one of the reasons the reform reduces the incentive to keep a mortgage purely for tax reasons. In the future, the old idea that "a mortgage is always useful because the interest is tax-deductible" will be much less valid.
For homeowners approaching retirement, this is also a retirement-planning topic. A lower mortgage may become more attractive, but the right answer depends on liquidity, pension income, affordability, renovation needs and long-term wealth planning. Our retirement planning service helps you review this before the new rules apply.
Who should be careful?
Homeowners with high mortgage debt should review their situation carefully. Under the new rules, private debt interest will be much more restricted. The deduction is not simply linked to the mortgage on your own home. Instead, it is calculated using a proportional method based on the value of rented or leased real estate compared with total assets. If you only own a self-used home and have no rented or leased property, your private debt interest may no longer be deductible.
Buyers of older properties also need to plan carefully. Today, qualifying value-preserving maintenance can reduce taxable income. From 2029, maintenance costs for self-used property will no longer be deductible. This makes the timing of renovations important, especially for larger projects such as roof work, façade repairs, heating systems or bathroom renovations. Our guide on deducting property maintenance costs explains the value-preserving vs. value-enhancing distinction that still applies until then.
The effect also depends on the future interest-rate environment. At low mortgage rates, many homeowners may benefit. At higher rates, the reform may increase the tax burden for many owners because debt interest is largely no longer deductible.
Special case: first-time buyers
To avoid making home ownership harder for younger or first-time buyers, the reform includes a limited first-time buyer deduction. Anyone buying owner-occupied residential property in Switzerland for the first time may deduct part of their mortgage interest for ten years. In the first year, the maximum deduction is CHF 10,000 for married couples and CHF 5,000 for single persons. The maximum amount then decreases each year.
This deduction is helpful, but it does not fully replace the current system. First-time buyers should still calculate affordability based on the new tax rules, not only on today’s rules.
If you are buying your first property in Switzerland as an expat or B-permit holder, also review whether you need to file an ordinary tax return. Our B-permit tax return guide explains when this may become relevant.
Important edge cases
Partly rented or mixed-use properties
If a property is partly self-used and partly rented, the tax treatment may need to be split. Examples include:
- a rented apartment within your own house,
- a holiday home that is partly rented out,
- partial business use,
- temporary rental during the year.
For business owners and sole proprietors, mixed-use situations should be reviewed separately. A property can affect both private tax planning and business-related deductions.
Rented investment properties
For rented or leased properties, rental income remains taxable and related maintenance costs remain deductible. However, the new debt-interest rules can still affect owners with both self-used and rented properties, because the deductible part of the interest depends on the proportion of rented or leased real estate within total assets.
Second homes and holiday homes
The imputed rental value will also disappear for self-used second homes. However, cantons may introduce a special property tax on predominantly self-used second homes. This will be especially relevant in tourism cantons and municipalities with many holiday properties. The exact impact will depend on the canton.
Energy-saving renovations
At federal level, deductions for energy-saving and environmental measures will disappear. Cantons may continue to allow such deductions, but only for a limited period. This means energy-related renovations should be reviewed from both a tax and investment perspective before 2029.
Why this matters beyond the tax return
The 2029 reform is not only a tax-return topic. It affects long-term financial decisions. For homeowners, the key question is no longer only "which costs can I deduct?". The better question is "how should I structure my mortgage, renovations, ownership and retirement planning under the new rules?".
This is where tax advice and independent financial planning meet. A renovation decision can affect taxes. A mortgage decision can affect liquidity and retirement income. An ownership structure can affect future taxation. And a second home can become subject to new cantonal rules. A tax return shows the result; good planning helps you make better decisions before the result appears.
Your checklist before the end of 2028
Review planned renovations. If you are planning larger value-preserving maintenance work, check whether it makes sense to complete it before 2029.
Separate maintenance from value-enhancing investments. Not every renovation is deductible under today’s rules. The distinction between value-preserving maintenance and value-enhancing investment remains important.
Review your mortgage strategy. The tax benefit of keeping debt will be reduced. From 2029, amortisation may become more attractive for some homeowners — and so can alternatives like pension fund buy-ins, which keep their own tax advantages.
Check second-home exposure. If you own a holiday home or second residence, monitor whether the canton plans to introduce a special property tax.
Model your personal situation. The impact depends on income, canton, mortgage level, renovation plans, property use and interest rates. A general rule is not enough. You can use our Swiss tax calculator as a first orientation; for individual cases, a proper review is still recommended.
How FIN can support you
The end of the imputed rental value is more than a technical tax change. It affects mortgage strategy, renovation timing, retirement planning and long-term wealth planning. FIN helps you review your personal situation and understand what the reform means for your property, your tax return and your financial planning. We analyse whether you should bring renovations forward, adjust your mortgage strategy or prepare for the new rules from 2029.
For annual filing support, see our tax return service. For strategic questions around property, mortgage and long-term planning, our financial advisory service is the right starting point. If you need local tax support, FIN also helps clients through tax advisory in Zurich, Zug, Basel, Aargau, Geneva, Thurgau, Schwyz and St. Gallen.
Independent, transparent and with clear flat rates — so you can make decisions before the rules change, not after.