Property taxation in Switzerland is set to undergo one of the most significant changes of the past decades. The abolition of the imputed rental value, confirmed to take effect in 2028, will fundamentally change how homeowners are taxed.
For many households, this reform represents a tax opportunity, but it will also require strategic adjustments, particularly regarding mortgages, renovations, and long-term wealth planning.
In this article, the experts at Opallia Homes explain what the end of the imputed rental value means in practice, its advantages and limitations, and the decisions homeowners should consider before 2028.
What is the Imputed Rental Value?
The imputed rental value is a fictitious income that the tax authorities add to the taxable income of homeowners who live in their own property.
The principle is simple: when a homeowner lives in their own home, they benefit from a financial advantage because they do not pay rent. This benefit is therefore treated as a theoretical income, called the imputed rental value.
For example, if an apartment could be rented for CHF 1,500 per month, the tax authorities may add approximately CHF 18,000 per year to the homeowner’s taxable income.
In return, the current system allows several tax deductions, including:
- Mortgage interest
- Certain maintenance costs
- Energy renovation expenses
This mechanism, which has existed for more than a century, was originally intended to ensure tax fairness between tenants and homeowners.
Why Was the Imputed Rental Value Abolished?
For many years, the imputed rental value has been widely criticized in Switzerland. Several arguments contributed to its abolition.
A tax on income that does not actually exist
Many homeowners consider it unfair to pay taxes on income that is purely theoretical.
A complex tax system
The calculation of the imputed rental value varies by canton and requires regular reassessments.
An incentive to remain in debt
Because mortgage interest is tax-deductible, some homeowners are encouraged to maintain higher mortgage debt instead of repaying it.
The reform therefore aims to create a simpler and more neutral tax system regarding debt.
What Will Change in 2028?
With the reform taking effect in 2028, several important changes will affect homeowners.
End of taxation on the imputed rental value
Homeowners living in their own property will no longer be taxed on a fictitious income.
Reduction of mortgage interest deductions
Mortgage interest will become far less deductible than it is today.
Changes to renovation and maintenance deductions
Some deductions related to maintenance and renovation costs may be limited or removed.
The overall goal of the reform is to eliminate a system that indirectly encouraged mortgage debt.
Who Will Benefit the Most from the Reform?
The abolition of the imputed rental value will not affect all homeowners equally.
Homeowners with little or no mortgage debt
Those who have already repaid most of their mortgage may see a reduction in their tax burden.
Retired homeowners
Some retirees currently pay significant taxes on the imputed rental value despite having lower incomes. The reform could reduce this financial pressure.
Long-time property owners
People who purchased their property many years ago and have largely repaid their mortgage may be among the main beneficiaries.
Who Could Be Less Favored?
n some situations, the reform could be less advantageous.
New buyers
Households with large mortgages will benefit less from tax deductions.
Owners planning major renovations
If certain deductions disappear, some renovation projects may become less attractive from a tax perspective.
5 Tips for Homeowners Before the Abolition of the Imputed Rental Value
The years leading up to 2028 represent an opportunity to adjust your real estate strategy.
1. Reassess your debt level
The reduction in mortgage interest deductions may make it more attractive to repay part of your mortgage.
Reviewing your debt strategy with your bank can help you prepare for the reform.
2. Planifier vos travaux avant 2028
If you are considering major renovations, it may be wise to carry them out before the reform takes effect, in order to benefit from the current tax deductions.
3. Conduct a personalized tax analysis
Each situation is different depending on:
- your canton
- your income
- your mortgage debt
- your real estate assets
A tailored tax analysis can help optimize your strategy.
4. Rethink your wealth strategy
The reform may influence important decisions such as :
- keeping a property long term
- investing in a new property
- transferring real estate to your children
A global wealth management approach becomes increasingly important.
5. Have your property value assessed
Tax changes can influence the behavior of buyers and sellers. A professional property valuation can help anticipate market trends.
The experts at Opallia Homes support homeowners in analyzing the market and adapting their real estate strategy.
What Impact Will This Have on the Swiss Real Estate Market?
Most specialists believe that the abolition of the imputed rental value should not cause a major shock to the real estate market.
However, several trends could emerge :
- more homeowners seeking to repay their mortgages
- evolving tax strategies among households
- stronger long-term property ownership
Despite these fiscal changes, real estate remains one of the most stable long-term investments in Switzerland.
The abolition of the imputed rental value in 2028 marks a major evolution in Swiss property taxation. While the reform simplifies the system and may reduce the tax burden for some homeowners, it also requires strategic thinking about debt, renovations, and wealth planning.
Anticipating these changes today will allow homeowners to take full advantage of the reform.
The specialists at Opallia Homes remain available to support both homeowners and buyers in their real estate decisions.