immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Steuerreform

  • Owner-occupied rental value not until 2029

    Owner-occupied rental value not until 2029

    In the fall of 2025, the Swiss population voted clearly in favor of abolishing the imputed rental value. The fictitious rental income that homeowners have had to declare as taxable income for decades, even though not a single franc flows in, has thus become politically obsolete. However, it took the Federal Council until the end of March 2026 to set a date for its entry into force and it ended up in 2029.

    Mountain cantons put the brakes on
    After the vote, Federal Councillor and Finance Minister Karin Keller-Sutter still mentioned 2028 as the earliest possible date. The mountain cantons, including Valais, pushed for 2030, as they need time to introduce a new tax on second homes to compensate for their tax losses. The year 2029 is the result of this trial of strength.

    70 million franc hole
    The canton of Valais alone is expecting tax losses of over 70 million francs as a result of the reform. The new property tax for second homes is intended to close this gap. But its implementation is complex. Cadastral values are outdated and the definition of second homes for private use is unclear. The question of whether the municipalities or the canton will levy the new tax is still open.

    Homeowners are outraged
    The Valais homeowners’ association campaigned strongly for the abolition of the tax during the referendum campaign. Association director Reinhard Meichtry commented on the Federal Council’s decision, saying that he initially believed it was an April Fool’s joke and that the decision was “absolutely unacceptable”. Meichtry announced that he would apply to the Federal Council for a rejection and also doubted the seriousness of the communicated tax loss figures.

    What applies now
    The current system will remain unchanged until the end of 2028. Owners continue to declare the imputed rental value and can deduct mortgage interest and maintenance costs. Anyone planning major renovations or mortgage adjustments should make strategic use of this transition phase, as most of these deductions will no longer apply when the system changes in 2029.

  • Zurich reintroduces hardship clause for imputed rental value

    Zurich reintroduces hardship clause for imputed rental value

    The cantonal council approved the reintroduction of the hardship clause at second reading by 136 votes to 29. The aim is to prevent situations in which homeowners have to sell their home due to rising imputed rental values and tax burdens. This was triggered by a Federal Supreme Court ruling that overturned the previous legal basis.

    Finance Director Ernst Stocker subsequently deleted the old clause, but applied for a new transitional regulation until the imputed rental value is completely abolished. Following the referendum in September to abolish the imputed rental value, the regulation will only be in place for a few more years.

    Political controversy
    While there was broad support, the Greens, AL and EVP rejected the model. They criticized the fact that tax relief does not have to be repaid in the event of inheritance and saw this as unequal treatment compared to tenants. However, the corresponding repayment proposal was clearly defeated.

    The government council still has to decide on Stocker’s transitional regulation. Both measures, the hardship clause and the transitional regulation, only apply until the anticipated abolition of the imputed rental value in 2027 or 2028. Zurich is thus sending a clear signal for a socially responsible property policy during the transitional phase of the tax reform.

  • New momentum for real estate funds

    New momentum for real estate funds

    For real estate funds, the reform seems unspectacular at first glance. Their properties are rented out, the rental income generated from them is still taxable and imputed rental value has never played a role here. Institutional investors therefore continue to pay tax on real income and not on fictitious income.

    The situation is completely different for owners of owner-occupied residential property. They benefit directly, provided their mortgage burden is low. This shift increases the attractiveness of home ownership and could further fuel demand for owner-occupied apartments and single-family homes.

    Price increases in a weak yield environment
    The move away from the imputed rental value comes at a time when yields on real estate investments have already fallen back to a low level. Rising demand for owner-occupied residential property is likely to push up prices. A scenario that puts additional pressure on project developers. Their calculations are becoming tighter, while investors and funds are simultaneously confronted with stagnating rental yields.

    An increase in prices also has an impact on the valuation of real estate portfolios. Funds with high market values could see lower initial yields as a result. This is a development that institutional investors will be watching closely.

    Tax policy countermeasures conceivable
    According to estimates, the abolition of the imputed rental value will lead to annual tax losses of around CHF 1.8 billion. One third of this will affect the federal government and two thirds the cantons. Experts such as Emanuel von Graffenried from BN Conseils warn that the cantons could partially compensate for this loss with new taxes.

    In particular, the introduction of a cantonal property tax is being discussed. Should such a tax become a reality, not only private owners would be affected, but also institutional investors and real estate funds. The reform would therefore indirectly impose an additional burden on the professional real estate sector, albeit with a time lag.

    Long-term market consequences for funds
    Even if the abolition of the imputed rental value is not a direct tax issue for funds, it will affect the environment in which they operate. Rising residential property prices, higher land values and a tightening rental market are changing the valuation basis for real estate investments.

    Experts expect that residential real estate funds in particular will have to make adjustments to their portfolio structure in the medium term. At the same time, tax policy steps by the cantons will change the attractiveness of individual locations. This is an aspect that is also likely to be important for the investment decisions of institutional investors in the future.

  • Farewell to imputed rental value

    Farewell to imputed rental value

    The adoption of the bill on the cantonal property tax for second homes marks the end of the imputed rental value. However, the change will take effect in two to three years at the earliest and will fundamentally change the everyday lives of many of those affected. Not only owners of owner-occupied and rented properties will feel the effects, but also households with debts without property ownership.

    Simplifications and exemptions
    With the abolition of the imputed rental value, maintenance costs and debt interest will also no longer be tax-deductible. However, to make it easier to purchase residential property, special rules apply for the first ten years after purchase. Debt interest of up to CHF 10,000 for married couples and CHF 5,000 for single persons is still deductible, but the remaining maximum amount is reduced by ten percent per year.

    Tax declarations will be simpler and the tax burden for many homeowners will fall in the current interest rate environment. Value-preserving and value-enhancing costs should be properly documented, as in future they can only be claimed when property gains tax is paid, i.e. when the property is sold.

    More restrictions on the deduction of debt interest
    Owners of investment properties are particularly affected by the reform. Interest on debt can now only be deducted in proportion to the value of the property in relation to total assets. This increases the tax burden and significantly limits the previous advantages.

    Taxpayers without real estate
    Households without real estate are also affected. Private debt interest, for example for loans or small loans, may no longer be offset against tax in future. This turns previous practice on its head and may lead to higher tax payments.

    Uncertainties and cantonal competence
    The cantons will have the option of levying a special property tax on second homes. This is a particularly sensitive issue for regions with a high level of tourism, as new taxes can affect the attractiveness of the market. It remains to be seen what the specific assessment bases will look like and which cantons will make use of the new options.

    The cantons can continue to allow temporary deductions for energy-efficient renovations and environmental protection measures until 2050. It is not yet known which cantons will offer this.

    Strategies for mortgages and investments
    The reform not only affects the tax rate, but also personal financial strategies. The question of how high mortgages should be set in future and whether amortization makes sense is becoming increasingly important. Anyone who uses capital for amortization ties it up in the property and loses liquidity for other purposes such as retirement provision or new investments. The decision on the optimal financing therefore requires individual consideration.

    Effects on the real estate market
    Whether the reform affects prices depends above all on the situation of new buyers, the majority of whom are highly mortgaged. According to SNB statistics, 40 percent of newly purchased homes are financed at over 74 percent of their value. Older properties in particular continue to lose tax advantages due to the limited deduction options. New condominiums in the canton of Zurich are on average 20 years old, single-family homes even around 50 years old. The fundamental challenges of high prices and scarce funds for acquisition remain unresolved by the reform.

    The abolition of the imputed rental value promotes the price difference between new buildings and older properties. Second homes are likely to become less attractive as a result of the new property tax, but experts do not expect prices for vacation homes to fall, as the supply shortage is too great.

    Prices for Swiss homes could rise by 4% this year and 4% next year, and by as much as 4.5% in the canton of Zurich. Renovating and maintaining the value of old buildings is becoming more important than ever, but not every investment pays off. Homeowners need to keep a keen eye on their long-term strategy: Is refurbishment worthwhile or is a new replacement building imminent?

    Reform as a joint project
    The changes are based on a close link between legislative and constitutional amendments. The abolition of the imputed rental value will only come into force if the referendum on the new property tax on second homes is successful. Parliament discussed the scope and form of the tax intensively for months. In tourist cantons in particular, there is a great deal of skepticism as to whether reduced revenue can be offset by new taxes. The laws come into force together, a reform with many facets.

    Tax and financial effects at a glance
    The mortgage interest rate determines whether owners benefit. If interest rates are low, the tax burden falls for the majority. If interest rates are high, taxes increase because interest on debt can hardly be deducted any more. For the public sector, the reform could result in a loss of revenue of CHF 1.8 billion. From 3 percent mortgage interest, however, additional revenue is possible for the state as a whole. The actual effects remain unclear for the time being due to various uncertainties.

  • A decisive vote for Switzerland

    A decisive vote for Switzerland

    On September 28, 2025, the Swiss people will vote on the abolition of the imputed rental value. The imputed rental value is a notional income that owners of owner-occupied properties must declare in their tax return. This value corresponds to around 60 to 70 percent of the rent that could be earned for the property. The abolition of the imputed rental value is linked to the introduction of a new property tax on second homes in order to compensate for potential tax losses for the cantons.

    Linked decisions and cantonal differences
    The vote on the abolition of the imputed rental value is closely linked to the introduction of a cantonal property tax on second properties. This tax is subject to a mandatory referendum, which means that the imputed rental value will only be abolished if the people and cantons approve the new tax. The voting results could vary greatly between the cantons, as the impact varies greatly from canton to canton.

    The Central Board of the Swiss Federation of Master Builders has decided to abstain from voting, as the pro and contra arguments are balanced from a national perspective. Almost 1.4 million households in Switzerland would be affected by the abolition, which corresponds to around a third of all households. The reduction in tax revenue is estimated at CHF 1.7 billion per year1.

    Effects on renovations and tax deductions
    The abolition of the imputed rental value would also mean that deductions for maintenance costs such as energy-related renovations for owner-occupied residential property would no longer apply at federal level. However, at cantonal level, deductions for dismantling costs for replacement new builds, expenses for monument preservation and energy-saving measures would remain permissible. It remains uncertain to what extent the lack of deductibility will actually lead to a reduction in renovations, as the tax burden for property owners would also fall thanks to the abolition of the imputed rental value.

    Property tax on secondary properties
    The introduction of property tax on secondary properties is intended to help the cantons compensate for any tax losses. Each canton can decide for itself whether it actually introduces this tax and to what extent. The abolition of the imputed rental value has been the subject of political debate for decades and has so far survived every attack. in 2017, parliament made a new attempt to abolish the imputed rental value4.

    A hotly contested vote
    The vote on the abolition of the imputed rental value and the introduction of property tax on second homes is likely to lead to a hotly contested vote. The bill is linked to the Federal Act on the System Change in Home Ownership Taxation. Only if the constitutional amendment is approved by the people and the cantons in the referendum can the bill for the change in the system of residential property taxation and thus the abolition of imputed rental value taxation come into force.

    The Swiss Homeowners’ Association has already decided to vote in favor of the proposal. The abolition of the imputed rental value tax is considered to be long overdue. The “Eigenmietwert-Nein” committee also recommends a Yes vote on the bill to abolish the imputed rental value tax.

  • Canton of Lucerne plans investments in living and business location

    Canton of Lucerne plans investments in living and business location

    The canton of Lucerne is planning an investment offensive to promote the location. Due to international tax developments such as the OECD minimum taxation, the canton is “losing its competitive advantage of low corporate profit taxes for large international companies”, explained the cantonal state chancellery in a press release. Specifically, there are fears that affected companies will relocate or limit their investments in the canton. The cantonal government wants to counteract this with targeted investments in the canton as a place to live and do business.

    A proposal submitted for consultation by the cantonal government on 10 March envisages investing CHF 300 million a year in a broad package of measures from 2026. “The canton of Lucerne is doing well, so we have the opportunity to invest in our living and economic environment and remain attractive in the long term,” said Fabian Peter, Head of the Cantonal Department of Building, Environment and Economic Affairs, in the press release. “That is the aim of this bill.”

    Two thirds of the funds will be used to strengthen the business location. The focus here is on promoting innovation and improving the framework conditions for digitalisation, the availability of business premises and customer-oriented administration. Of the remaining CHF 100 million in favour of the people of Lucerne, the lion’s share of CHF 70 million is earmarked for a reduction in the tax rate for natural persons.

  • Raiffeisen analyses abolition of imputed rental value

    Raiffeisen analyses abolition of imputed rental value

    Raiffeisen has analysed the planned abolition of the taxation of imputed rental value for owner-occupied residential property. In the winter session in December, the Federal Parliament decided to change the system of home ownership taxation. Now the people have the final say at the ballot box, according to a press release from Switzerland’s second-largest banking group.

    If the proposal is accepted, homeowners would realise considerable tax savings in some cases, depending on the type of household, given the prevailing low interest rates. The housing cost advantage of home ownership over renting is growing steadily and could rise to up to 30 per cent over the course of the year.

    If the imputed rental value were to be abolished, home ownership would become noticeably more financially attractive overall in the current market environment and consequently also increase in value, according to Raiffeisen. However, homes in need of renovation are likely to lose value due to the elimination of deferred tax deductions as a result of the reform.

    “One of the potential losers of the reform is the construction industry. Although it is likely to benefit from many last-minute orders in the short term during the transitional phase until the reform comes into force, in the long term fewer funds will flow into the renovation of residential buildings due to the elimination of a large proportion of tax maintenance deductions,” Fredy Hasenmaile, Chief Economist at Raiffeisen Switzerland, is quoted as saying.

    If the prevailing interest rate environment remains unchanged, the tax authorities would also have to reckon with billions in lower revenues for years to come as a result of the reform.