Imputed rental value

The Swiss people have decided: The imputed rental value will be abolished. This result of the referendum entails far-reaching tax changes that will affect homeowners in particular. The new regulations will come into force on January 1, 2028 at the earliest and require early consideration of the changes.

What will change in concrete terms?

1. Abolition of taxation of imputed rental value
   The notional rental income that owners previously had to pay tax on as income will no longer apply in future.
2. Restriction on the deduction of interest on debt
   In future, mortgage interest and debt interest from consumer credit and private loans can only be claimed for tax purposes to a limited extent or not at all. This affects not only owners, but also tenants. Exceptions apply to rented properties and first-time buyers.
3. Elimination of deductions for maintenance and renovations
   As there is no longer any taxable income, the previous deductions for maintenance work and renovations will also largely cease to apply.
4. Introduction of property tax for second homes
   Cantons with a high number of second homes will have to accept significant tax losses. New property taxes will therefore be introduced for vacation homes in the respective cantons, which may lead to adjustments to tax declarations and invoices.

 

Who benefits, who loses?

• Advantageous for debt-free owners: the tax burden is reduced, as neither imputed rental value nor interest on debt are relevant.
• Disadvantage for heavily indebted owners and tenants: The elimination of the debt interest deduction leads to a higher tax burden.

 

Strategic considerations for the transition period

• Check amortization: Reducing the mortgage may make more tax sense in the future.
• Bring forward renovations: Maintenance work that is currently still tax-deductible should ideally be carried out before the new regulation comes into force.

 

The abolition of the imputed rental value entails a fundamental change in the tax treatment of residential property. Owners and tenants alike are called upon to rethink their financial and tax strategy. Early planning can help to avoid tax disadvantages and take advantage of new opportunities. Our team of experts will be happy to help you analyze your individual situation and show you what options are open to you. Contact us - we will advise you competently and personally.

Note: Real estate sales with our real estate partner AgentSelly

Have you been toying with the idea of selling your property for some time? Or has the discussion surrounding the vote on the imputed rental value just given you the idea? Either way, AgentSelly is here to help you with real estate valuation and sales! Just like aidoo, with an innovative mix of digitalization and personal contact. Further information and contact details can be found under the following link.