Imputed Rental Value Ends in 2029: Who Wins and Who Loses?
From 2029, the imputed rental value will be abolished in Switzerland. For many homeowners, taxable income will fall – but important deduction options will also disappear.
In brief
The imputed rental value will be abolished as of 1 January 2029. This means homeowners will no longer have to tax the notional rental value of their owner-occupied apartment or house as income. In return, key deductions will be abolished or reduced, especially for maintenance and mortgage interest. Who wins or loses therefore depends heavily on the mortgage, interest-rate level, renovation needs, canton and personal tax situation.
What is imputed rental value?
Imputed rental value is a notional income from owner-occupied residential property. Anyone living in their own apartment or house previously had to declare this calculated rental value as income. In return, homeowners could deduct certain costs, such as mortgage interest and maintenance expenses.
The system has been controversial in Switzerland for years. Supporters of abolition see it as simplification and relief for homeowners. Critics warn of lower tax revenues, distributional effects and disadvantages for households with high mortgages or major renovation needs.
What applies from 2029?
From 1 January 2029, taxation of imputed rental value on owner-occupied residential property will be abolished. This applies to primary residences and second homes. At the same time, previous deduction options will be significantly restricted or abolished.
Who wins and who loses?
Winners
Homeowners with low mortgages, little mortgage interest and limited renovation needs benefit particularly because imputed rental value disappears and they lose few deductions.
Mixed impact
New buyers benefit from the first-time buyer deduction, but in the long term they lose a large part of the mortgage interest deduction.
Losers
Households with high mortgages, high interest costs or major renovations lose important deductions and may be worse off for tax purposes.
The reform does not affect everyone in the same way. When mortgage interest rates are low, more households benefit because the lost mortgage interest deductions matter less. When interest rates are higher, the loss of deductions can have a stronger effect. That is why the amount of the imputed rental value is not the only decisive factor; personal financing also matters.
Today and from 2029 compared
| Aspect | Until the end of 2028 | From 2029 |
|---|---|---|
| Imputed rental value | Taxed as income on owner-occupied residential property | Abolished for owner-occupied residential property |
| Maintenance costs | Can be deducted depending on the situation | Generally no longer deductible for owner-occupied residential property |
| Mortgage interest | More broadly deductible, depending on tax law and individual situation | Significantly restricted; mainly proportional for rented or leased properties |
| First-time buyers | No specific system-change deduction | Temporary and capped first-time buyer deduction for mortgage interest |
| Second homes | Imputed rental value is also taken into account | Imputed rental value disappears, but cantons may introduce a property tax |
| Renovations | Maintenance deductions and certain energy-related deductions may be relevant | Deductions largely disappear for owner-occupied residential property or are restricted at cantonal level |
Step by step: How homeowners can prepare for 2029
- Compile current imputed rental value, taxable income and previous deductions.
- Review mortgage, interest rate, terms and planned amortisations.
- Plan maintenance and renovation needs realistically up to 2029.
- Have it calculated whether renovations are more tax-efficient before or after the system change.
- If the mortgage is high, check how strongly the loss of the mortgage interest deduction will affect you.
- For second homes, clarify whether the canton plans a special property tax.
- For first-time buyers, check whether the temporary mortgage interest deduction is relevant.
- Coordinate mortgage strategy, amortisation and tax planning with specialists.
Assessment questions: Will I win or lose from 2029?
The following questions help homeowners, buyers and advisers assess the reform.
Assessment questions on the abolition of imputed rental value
1. How high is my current imputed rental value?
2. How high is my annual mortgage interest?
3. Which maintenance costs have I regularly deducted so far?
4. Are major renovations or energy-related upgrades planned?
5. Do I have a high or low mortgage relative to the property value?
6. Am I a first-time buyer of owner-occupied residential property?
7. Do I own a second home in a tourism-oriented canton?
8. How does my taxable income change without imputed rental value and without previous deductions?
9. Should I bundle maintenance work before 2029?
10. Does my amortisation strategy still fit the new system?Practical examples
Example 1: Retired couple with a low mortgage
A retired couple lives in their own house and has strongly amortised the mortgage. Until now, imputed rental value increased their taxable income, while only limited mortgage interest could be deducted. From 2029, this couple is likely to benefit, provided no major maintenance deductions disappear.
Example 2: Young family with a high mortgage
A family recently bought residential property and financed a large part with a mortgage. The abolition of imputed rental value provides relief, but at the same time the previous mortgage interest deduction becomes much more restricted. Depending on interest rates and the first-time buyer deduction, the reform may be neutral, positive or negative for this family.
Checklist: What homeowners should review before 2029
Frequently asked questions about the abolition of imputed rental value
Summary
With the abolition of imputed rental value from 2029, home ownership taxation in Switzerland will change fundamentally. Homeowners with low mortgages, low mortgage interest and limited maintenance needs tend to be among the winners. Households with high mortgages, high interest costs, major renovations or second homes in cantons with a new property tax may lose. The decisive factor is therefore not only the political headline, but the individual calculation: imputed rental value, deductions, mortgage, interest-rate level, renovation needs and cantonal rules must be assessed together.