Tax Tip #2 / Deduct Your Property Maintenance Costs

Your home, your assets, your tax advantages.

FIN makes complex tax rules easy to understand – and shows you what really matters.
Here’s everything you need to know about mortgages, property maintenance, and eco-friendly investments – without financial jargon.

What You Should Know as a Homeowner

Mortgage Interest

Every franc you pay in interest counts.
You can deduct mortgage interest in your tax return – reducing your taxable income immediately.

Imputed Rental Value

Even if you live in your own home, the so-called imputed rental value is taxable.
However, the interest payments you make are deductible and help reduce your tax burden.

Debt Principle

Your mortgage debt lowers not only your taxable income but also your wealth tax – a double benefit.

Indirect Amortisation

Many homeowners repay their mortgage through pillar 3a (tied pension savings).
This creates real tax optimisation – the mortgage officially remains, and you continue benefiting from interest deductions.

Tax Optimisation

A smart mortgage strategy gives you flexibility – but always consider the bigger picture.
Seek advice to assess whether an adjustment makes sense for your financial situation.

Cantonal Differences

Each canton applies its own rules.
Check the details with your cantonal tax office or refer to the official tax guidelines (see link list below).

Energy-Efficient Investments

If you invest in energy-saving renovations or incur demolition costs for a replacement building, you can spread those costs over two following tax years if they can’t be fully deducted in the current year.

Property Maintenance: What Counts – and What Doesn’t?

RULE:
Ongoing maintenance expenses that preserve your property’s value (e.g. servicing, repairs, insurance, upkeep) are tax-deductible.

You can choose between:

• a flat-rate deduction (based on your imputed rental value), or
  
• the actual deduction for your maintenance and investment costs.
  

Tip:
For major renovations or conversions, the actual deduction usually pays off.

Investments that improve energy efficiency or environmental protection enjoy special tax benefits: They are deductible in the year incurred and, if not fully credited, in the two following years. That means: you can carry forward unclaimed deductions to the next tax year.

Examples of Deductible Investments

• Thermal insulation, improved windows, roof upgrades, modern heating systems, etc.
• Demolition costs for a replacement building
• Unused deductions can be carried forward to subsequent years
  

During these periods, the flat-rate deduction does not apply – all other maintenance costs must be proven with documentation.

Value-Preserving vs. Value-Enhancing Investments

Value-Preserving:
Serves to maintain existing structures (e.g. repairs, painting) – fully deductible.

Value-Enhancing:
Creates permanent added value (e.g. extensions, luxury upgrades) – not deductible for income tax,
but relevant for property gains tax when selling.

Mixed Cases:
Keep your records transparent and allocate costs clearly.
That ensures clarity in your tax case.

How to Keep Proper Documentation

Maintain a clear, ideally digital, overview of all expenses.
Each entry should include:

• Date
• Purpose or type of work
• Indication if energy-efficient
• Contractor
• Amount
  

Practical Tip:
Use digital tools such as the Smart eTax platform for safe and structured record-keeping. Simply upload receipts via mobile – available anytime and fully tax-compliant.

Checklist:

• Keep invoices, receipts, and supporting documents (digital or physical)
• Attach all relevant documentation to your tax return – even if some items matter only upon sale
• Keep your records up to date throughout the year
  

Canton-Specific Details

• Zurich
• Zug
• Thurgau
• Schwyz
• Luzern
• Graubünden
• Ticino
• Bern
• Basel Landschaft

FIN – Clarity. Independence. Genuine guidance.