From 1 January 2029, Switzerland will abolish the imputed rental value, known as Eigenmietwert, for owner-occupied residential property. At the same time, important deductions will be restricted or removed, including maintenance costs for self-used property and most private debt interest.
The reform looks simple on paper. In practice, several situations will require careful planning: first-time buyers, replacement purchases, divorce or co-ownership, partly rented properties, second homes and the upcoming individual taxation from 2032. If you buy, sell, renovate or jointly own Swiss property, the years before 2029 are an important planning window.
For the general overview, read our guide to the 2029 homeowner tax changes.
Why the reform creates gray areas
The abolition of the imputed rental value is a major system change. Today, homeowners declare a fictitious income from their own home, but can deduct mortgage interest and qualifying maintenance costs. From 2029, the imputed rental value disappears. In return, several deductions disappear or become much more limited.
For standard cases, the direction is clear. But real life is rarely standard.
Many homeowners buy as a couple, renovate over several years, sell and buy again, own second homes, rent out part of a property or go through changes such as divorce or inheritance. These are the areas where tax planning becomes more important.
1. Individual taxation from 2032
Switzerland has approved the introduction of individual taxation. The new system is expected to apply by 2032 at the latest. Under individual taxation, married couples will no longer file one joint tax return. Each person will declare their own income and assets separately. For real estate, the allocation will generally follow the civil-law ownership structure, especially the land-register entry.
Example: a married couple owns a home 50/50, but one spouse pays most of the mortgage interest or contributed most of the equity. Under the new system, deductions, assets and income allocation may no longer follow the household as one unit — they may follow the legal ownership structure.
This can become relevant for:
- unequal income levels between spouses,
- unequal equity contributions,
- different mortgage payment arrangements,
- co-ownership quotas,
- marriage contracts,
- divorce planning.
The key question is simple: does your legal ownership structure still match your financial reality? Couples who own property together should review this before individual taxation starts, especially if income, equity contribution or ownership shares are not equal. This is where tax advice and financial planning overlap — a legal ownership structure can affect taxes, mortgage planning, retirement income and long-term wealth planning.
2. First-time buyer deduction
The reform includes a limited deduction for first-time buyers. Anyone buying owner-occupied residential property in Switzerland for the first time may deduct part of their mortgage interest for ten years. The maximum amount starts at CHF 10,000 for married couples and CHF 5,000 for single persons in the first year, then decreases each year.
This deduction is helpful, but it creates practical questions. What happens if two people buy together, but only one of them is a first-time buyer? What happens if a couple buys before 2029, then individual taxation starts during the ten-year period? Should the remaining deduction follow the legal ownership share, the financing share, or another allocation?
The law gives a general framework, but in complex ownership structures the practical application may still need guidance from tax authorities. For buyers, this means documenting clearly who owns what, who finances what, and whether each person qualifies as a first-time buyer.
For expats and B-permit holders, it is also important to check whether property ownership changes the tax filing situation. Our B-permit tax return guide explains when an ordinary Swiss tax return may become relevant.
3. Replacement purchases after selling a first home
A common situation is easy to imagine: a young family buys its first apartment, uses the first-time buyer deduction, then sells after a few years and buys a larger home. This is not automatically a tax problem. Official guidance refers to replacement property within an appropriate period — however, the details matter.
If there is a long gap between sale and new purchase, or if the new property is structured differently, the remaining deduction period may be affected. This is why replacement purchases should not be treated as a simple copy-paste of the old situation. Important questions include:
- Was the first property continuously owner-occupied?
- Was the new property bought within an appropriate period?
- Is the new property used in the same way?
- Are the same people still owners?
- Did the ownership shares change?
Selling also brings the real-estate capital gains tax into play — see our guide on reducing capital gains tax when selling property. For families planning to move between 2027 and 2032, this should be reviewed before signing.
4. Divorce, co-ownership and patchwork families
Divorce and changed family situations are among the most sensitive edge cases. Example: a couple buys a home and claims the first-time buyer deduction. A few years later, they divorce. One person keeps the home, the other moves out and may buy again later. The open questions are practical:
- Who keeps the remaining deduction period?
- Does the person moving out lose the benefit?
- What happens if the property is transferred internally?
- What if one person was a first-time buyer and the other was not?
- How are mortgage payments treated if ownership and actual payment do not match?
These cases need a clean link between tax, mortgage, ownership and family-law documentation. This is exactly where independent tax and financial planning can create clarity before the situation becomes difficult.
5. Partly rented and mixed-use properties
This is one of the most important practical gray areas. A property may be partly self-used and partly rented. Examples include a house with a rented apartment, a holiday home that is partly rented out, partial commercial or business use, or temporary rental during the year.
For fully rented properties, rental income remains taxable and related deductions remain possible. But for partly rented properties, the split between private use and rental use can become more complex. This also matters for sole proprietors or business owners using part of a property for professional purposes. The tax treatment should be reviewed carefully, especially where private use, business use and rental income meet. Owners should keep better records in future: rental days, private-use days, income, costs and renovation expenses.
6. Cantonal patchwork for renovations and second homes
At federal level, deductions for energy-saving and environmental investments will no longer be allowed after the reform. Cantons may continue such deductions for a limited period, but not necessarily in the same way. This creates a federal-versus-cantonal difference: a renovation may still be relevant at cantonal level, while no longer being deductible for direct federal tax.
Second homes are another important case. The imputed rental value will also disappear for owner-occupied second homes. At the same time, cantons may introduce a special property tax on predominantly self-used second homes to compensate for lost tax revenue. This will be especially relevant in cantons with many holiday properties.
Owners should therefore not only ask "what changes in Switzerland?" but "what changes in my canton?". For local support, FIN provides tax advisory in Zurich, Zug, Basel, Aargau, Geneva, Thurgau, Schwyz and St. Gallen.
What property owners should review before 2029
Ownership structure. Does the land-register entry reflect the economic reality between spouses, partners or co-owners?
Mortgage strategy. Does it still make sense to keep debt if private debt interest is largely no longer deductible?
Renovation timing. Should qualifying value-preserving maintenance be completed before 2029?
First-time buyer status. Who qualifies, for how long, and under which ownership structure?
Second-home exposure. Could a cantonal object tax affect your holiday home or secondary residence?
Retirement planning. Will the new rules change your amortisation strategy, liquidity needs or retirement income planning? This is especially relevant for homeowners approaching retirement — our retirement planning service helps connect tax, mortgage and long-term wealth questions.
FIN perspective: tax clarity before decisions are made
The 2029 reform is not only about tax deductions. It changes how homeowners should think about debt, renovations, ownership shares and retirement planning. A tax return shows the numbers after decisions have already been made. Good planning helps you make better decisions before those numbers appear.
That is why this reform is relevant for both tax advisory and financial advisory. If your main concern is the annual filing, our tax return service is the right starting point. If you want to review the wider impact on mortgage, property, retirement and long-term wealth, our financial advisory service can help.
Conclusion
The abolition of the imputed rental value is not only a tax change. It affects how homeowners should think about mortgages, renovations, ownership shares and long-term planning. For simple cases, the impact may be straightforward. For couples, first-time buyers, second-home owners, patchwork families and mixed-use properties, the details matter.
FIN helps you understand what the reform means for your situation — clearly, independently and with one point of contact. Plan before the rules change, not after.
Related FIN services
- Financial Advisory
- Retirement Planning
- Tax Return Switzerland
- B-Permit Tax Return
- Self-Employed & Sole Proprietors
- Local tax advisory in Zurich, Zug, Basel, Aargau, Geneva, Thurgau, Schwyz and St. Gallen