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Key facts:
- In 2029, the tax-deductible imputed rental value for owner-occupied residential property in Switzerland will end.
- Maintenance costs and many renovation deductions are eliminated at the federal level.
- 2026, 2027, and 2028 are considered a crucial window of opportunity for renovations and tax optimization.
For nearly 70 years, homeowners in Switzerland have had to pay taxes on a notional income — the imputed rental value. That will come to an end in 2029. For the years 2026 through 2028, this presents a narrow but valuable window of opportunity: Those who plan now can still take advantage of renovations and tax deductions under the old system before the rules change fundamentally.
On September 28, 2025, Swiss voters approved this system change with 57.7% of the vote in favor. The Federal Council did not set the exact date until April 1, 2026 – and chose January 1, 2029, a year later than many experts had originally expected.
Background: Why the imputed rental value is being abolished
The imputed rental value was originally introduced in 1914 as a temporary wartime measure, reinstated in 1934 during the Great Depression, and permanently enshrined in tax law in 1958.
The principle: Anyone who lives in their own home must pay taxes on a notional rent – usually 60–70% of the market rent.
What Will Change Specifically Starting in 2029
| Period | Through December 31, 2028 | From January 1, 2029 |
| Imputed Rent | Must be taxed as income (60–70% of the market rent) | Not applicable |
| Interest Deduction on Debt | Fully deductible | Largely inapplicable at the federal level for owner-occupied residential property |
| Living Expenses | Fully deductible | Not applicable at the federal level |
| Energy-Efficient Renovations | Fully tax-deductible | Cantons may grant deductions for a limited period until 2050 |
| Historic Preservation | Deductible | Remains deductible if required by law |
| Second Homes | Imputed rental value and deductions are the same as for a primary residence | Imputed rental value no longer applies; a new cantonal property tax is added |
Important: Cantonal implementation has not yet been fully harmonized. Cantons have until 2050 to establish their own regulations regarding tax deductions for energy-efficiency renovations – it’s worth checking with your local tax office.
Winners and Losers of the Reform: Who Is Most Affected
The impact of the reform varies significantly depending on one’s stage of life, level of debt, and real estate strategy.
Homeowners with no debt often benefit greatly from the elimination of the imputed rental value, since they previously had to pay taxes on a notional income without being able to claim significant interest deductions on their debt.
The situation is different for young families with large mortgages. In the future, they will lose important tax breaks.
| Household Situation | Benefit from the Elimination of the Imputed Rental Value | Disadvantage due to the elimination of deductions | Overall Trend |
| Retired couple, debt-free | High | Low | Clear winner |
| Family with a Large Mortgage | Medium | High | Somewhat burdened |
| Owners with significant renovation needs | Medium | High | Time-sensitive |
| Investors with income-producing properties | Depending on the structure | Still possible in some cases | Varies |
An individualized analysis becomes particularly important in cases involving more complex ownership structures or multiple properties.
The window of opportunity through 2028: the last chance for tax deductions
As long as the imputed rental value is still subject to taxation, renovations that preserve property value can be directly offset against the highest income tax bracket. Deductible through December 31, 2028:
- Painting, Plumbing, General Maintenance
- Thermal insulation, window and door replacement, heating system replacement
- Solar Systems and Photovoltaics
- GEAK Plus (Building Energy Certificate) including a combination of grants
GEAK Plus Becomes a Strategic Planning Tool
As part of the reform, the GEAK Plus is becoming even more important. The building energy certificate not only assesses a property’s energy efficiency but also outlines specific renovation options, including investment costs, subsidies, and potential savings.
Especially in light of the planned abolition of the imputed rental value in 2029, the GEAK Plus will serve as the basis for strategic decisions for many homeowners:
- What investments are still worth making before 2029?
- What measures increase property value in the long term?
- What funding programs are available?
- Which mortgage strategy is best suited for renovation planning?
A structured overview helps you view investments not in isolation, but as part of a long-term wealth management strategy.
Renovation Boom Expected in 2027/2028
Industry experts anticipate a massive rush on small businesses as the deadline approaches – with correspondingly longer wait times and rising prices. Anyone planning larger projects should commission them as early as 2026 and, ideally, strategically spread them out over 2027 and 2028 to break up the tax progression across multiple periods.
The Pro-Rata Restrictive Method for Investment Properties Explained
For rental properties, the deduction for interest on debt will continue to apply in certain cases. In the future, the so-called “proportional-restrictive method” will be applied.
The principle: Interest on debt may now be deducted only on a pro rata basis in proportion to the value of the assets; the determining factor is the proportion of the tax value of the rented properties relative to total assets.
A simplified example:
An owner owns:
- an owner-occupied single-family home
- a rented condominium
Total mortgage debt: CHF 800,000
Annual debt interest: CHF 16,000
Of this total:
- 70% on the owner-occupied property
- 30% off the investment property
Under the reform, only the CHF 4,800 in interest on the debt for the rented property would be tax-deductible.
That is why the financing structure becomes particularly important, especially for mixed portfolios. Property owners with multiple properties should assess early on how to optimally allocate their mortgages in the future.
The Transition Bonus for First-Time Homebuyers
To ease the burden on younger buyers in particular, the reform provides for a temporary transitional deduction.
First-time homebuyers can claim additional interest deductions for ten years:
- Married couples: CHF 10,000 in the first year
- Single individuals: CHF 5,000 in the first year
- followed by an annual reduction of 10%
The bonus is intended to offset the high financing costs during the initial phase and make it easier to become a homeowner.
For buyers planning to make a purchase between 2026 and 2029, the timing may therefore be relevant for tax purposes.
Second Homes: Hit Twice as Hard
Vacation properties will not only lose all their existing tax deductions—a new cantonal property tax will also be introduced, the exact amount of which is still under debate in the legislature:
| Canton | Tax Rate (‰) | Property tax on CHF 1 million |
| Valais | 1.5–2.5 ‰ | CHF 1’500–2’500 per year |
| Graubünden | 1.5–3.0 ‰ | CHF 1’500–3’000 per year |
| Ticino | 2.0–3.0 ‰ | CHF 2’000–3’000 per year |
| Vaud | 1.0–2.0 ‰ | CHF 1’000–2’000 per year |
Why Low Blood Alcohol Concentrations Add Up
At first glance, these rates seem low. Over a period of ten years, however, the property tax on a vacation home with a tax value of CHF 1.5 million quickly adds up to between CHF 30’000 and 45’000 – as a purely additional burden, without factoring in maintenance costs or interest on debt.
Anyone who owns a vacation property should complete all major renovations by the end of 2028 and also consider renting out part of the property in order to benefit, at least in part, from the pro-rata restrictive method.
Strategic Roadmap: What Property Owners Should Specifically Consider Through 2029
The elimination of the imputed rental value in 2029 is less a single tax issue and more a comprehensive systemic change. Early planning will therefore be crucial.
The focus is on three areas in particular.
1. Bring forward planned renovations
Anyone planning major maintenance work should consider whether it makes sense to carry it out by the end of 2028.
This applies in particular to:
- energy-efficient renovations
- Renovations That Preserve Value
- Heating System Replacement
- Building Envelope and Insulation
2. Reevaluate Mortgage Strategy
Many homeowners have also optimized their financing for tax purposes up to now. With the elimination of these deductions, this approach is changing.
Important Questions:
- Does it make sense to increase depreciation?
- What terms are appropriate for the new situation?
- How will the long-term tax burden change?
3. Analyze Property Value and Energy Efficiency
The combination of:
- GEAK Plus
- Funding Programs
- Market Value Analysis
- Financing Strategy
is increasingly becoming the standard in professional real estate planning.
Older properties, in particular, are increasingly in the spotlight, as buyers and banks are likely to place greater emphasis on energy efficiency in the future.
Conclusion: The years 2026, 2027, and 2028 will be crucial
The elimination of the imputed rental value in 2029 will bring about structural changes to the Swiss real estate market. For property owners, this creates a limited window of opportunity to optimally coordinate tax benefits, renovations, and financing strategies.
This is particularly relevant for:
- Owners of older properties
- Households with major renovation plans
- heavily leveraged properties
- mixed real estate portfolios
By planning early, you can not only avoid tax disadvantages but also safeguard the long-term value of your property.
properti supports property owners with data-driven market analyses, regional expertise, and a structured assessment of renovation and sale options.
FAQs
What exactly does the elimination of the imputed rental value in 2029 mean?
The imputed rental value – which is treated as notional income for owner-occupied residential property – will be eliminated starting in 2029. At the same time, however, important tax deductions for maintenance, energy-efficiency renovations, and mortgage interest will be reduced or eliminated at the federal level.
Why are experts talking about a renovation boom in 2026?
Many homeowners want to carry out major renovations before 2029 so they can continue to take advantage of existing tax deductions. As a result, demand for renovations is expected to rise in 2026, 2027, and 2028.
Who stands to benefit the most from the reform?
Above all, homeowners with no debt or low debt often benefit from the elimination of the imputed rental value. In the future, they will save on taxes that were previously levied on this notional income.
What happens to interest deductions on debt for investment properties?
Interest deductions on debt remain possible in some cases for rental properties. Going forward, the pro-rata restrictive method will apply: The determining factor is the proportion of the tax value of the rental properties relative to total assets.
Is it worth getting a GEAK Plus before 2029?
Yes. A GEAK Plus helps homeowners identify energy-efficiency weaknesses, funding opportunities, and economically viable renovation options at an early stage. This becomes even more strategically important in the run-up to the reform.
Should a mortgage be adjusted before 2029?
That depends on the individual situation. Since tax deductions for interest on debt will be limited in the future, a new amortization or term strategy may be advisable. An early analysis provides planning certainty.
What will change for second homes?
Starting in 2029, vacation properties will lose all existing tax deductions and will also be subject to a new cantonal property tax, the rate of which ranges from 1.0 to 3.0 per mille of the assessed value, depending on the canton.
Data are without guarantee. The information on these Internet pages has been carefully researched. Nevertheless, no liability can be assumed for the accuracy of the information provided.