When will the imputed rental value finally be abolished in Switzerland?

The 3-point orientation

According to the current situation, the imputed rental value in Switzerland will be abolished as of January 1, 2029. The Swiss electorate adopted the reform on September 28, 2025, and the Federal Council set the entry into force for 2029. Owners must continue to tax the imputed rental value until the end of 2028. However, the abolition also eliminates many previous tax deductions, in particular for property maintenance and private debt interest on owner-occupied residential property.

The principle: The abolition has been decided but is not yet effective

The question when will the imputed rental value finally be abolished in Switzerland? can be answered more clearly today than just a few years ago. The political decision has been made. The reform was adopted and the Federal Council has set the date for its entry into force. Nevertheless, the imputed rental value remains part of the tax return until the end of 2028.

This means that anyone who lives in an owner-occupied apartment or house today must continue to declare the imputed rental value as fictitious income. At the same time, previous deductions, such as mortgage interest and property maintenance, can in principle continue to be claimed under applicable law.

The actual system change will only take place when the reform comes into force. From then on, the imputed rental value on owner-occupied residential property is no longer taxed. At the same time, however, the previous withdrawal system is also being severely restricted. The reform is therefore not just a tax relief for everyone, but a comprehensive restructuring of residential property taxation.

The date: January 1, 2029

As things stand, the abolition of imputed rental value will take effect on January 1, 2029. This date is particularly important for owners because it can influence tax planning, renovation planning, mortgage strategy and retirement planning.

The current system will continue to apply until and after tax year 2028. Owners declare the imputed rental value and can deduct debt interest and maintenance costs, depending on the situation. From tax year 2029, the imputed rental value for owner-occupied residential property is to cease.

In practice, this means that the tax return for 2028 is still being prepared according to the previous system. The tax return for 2029 is expected to be filed under the new system for the first time. Anyone planning major renovations, amortization or mortgage decisions should consider this transition early on.

Why does implementation take until 2029?

Many owners are wondering why the abolition is not immediate. The reason lies in implementation. The reform affects the federal government, cantons and municipalities. Tax administrations must adapt systems, forms, guidelines, cantonal rules and transitional issues. Cantons are also given time to prepare new regulations relating to secondary properties.

An important point is the possibility of a special property tax on second homes. This is intended to help cantons compensate for any tax losses. Tourism and mountain cantons in particular have an interest in giving them enough time to prepare for this.

The transition period up to 2029 therefore does not mean that the reform is uncertain. In particular, it means that the system change should be properly implemented administratively and cantonally. For owners, however, this creates an intermediate phase in which the old system continues to apply.

What is the imputed rental value anyway?

The imputed rental value is a fictitious income that owners must tax if they live in their own property themselves. The tax logic behind this is: If you live in your own property, you save on rent. This usage advantage is treated as income for tax purposes.

The imputed rental value is based on the estimated rent that the property could earn if rented out. In practice, it is usually below market rent, but is still noticeable for tax purposes. Especially for pensioners with a paid house, the imputed rental value can be burdensome because it increases taxable income without money actually flowing.

This criticism was one of the main reasons for many years of political discussion. Many owners found the imputed rental value unfair because fictitious income is taxed. Proponents of the previous system argued against that interest on debt and maintenance could only be deducted because the imputed rental value was taxed.

What will change for owner-occupied residential property from 2029?

From 2029, the imputed rental value for owner-occupied residential property should no longer be taxed. At first glance, this means relief for owners: The fictitious income is lost and the taxable income can fall.

At the same time, however, many previous deductions are omitted. Anyone who lives in their property can only deduct private debt interest to a limited extent or not at all as before. The deduction for property maintenance is also generally omitted in the case of owner-occupied residential property. This significantly changes the tax bill.

Owners with high mortgage and high maintenance costs are particularly affected. Anyone who today benefits heavily from debt interest and maintenance deductions can be relieved less by the reform or even drive worse in individual cases. On the other hand, anyone who has few debts and low maintenance costs is more likely to benefit.

What happens with the alimony deduction?

The previous maintenance deduction is one of the most important points of the reform. Today, owners can deduct value-maintaining maintenance costs for tax purposes. This includes, for example, repairs, painting, replacement of installations, maintenance of the roof, façade, heating or other parts of a building, provided that they do not add value.

With the abolition of the imputed rental value, this deduction also applies in principle to owner-occupied residential property. This is logical in the new system: If the usage benefit is no longer taxed, the associated costs should no longer be deductible to the same extent.

For owners, this means that major maintenance work should be planned in good time. Anyone planning restructuring anyway should check whether these make more tax sense before the system change. It is important not to act hastily. Renovations should be structurally and financially viable, not just tax-motivated.

What happens with energy renovations?

Energy-related renovations are a special topic. It was politically disputed whether such deductions should be completely omitted or whether they could be partially retained at the cantonal level. In practice, cantons can continue to provide for certain tax incentives for saving energy, environmental protection or monument preservation work.

This means that after the imputed rental value has been abolished, individual deduction options for energy measures may remain, depending on the canton. However, the details depend on cantonal law. Owners should therefore not assume in general that nothing is deductible from 2029, but should also not rely on the fact that all current deductions will continue to exist.

When planning, it is crucial to check the cantonal rules. Tax differences may be particularly relevant for heat pump, solar systems, insulation, windows, roof renovation or replacement construction.

What happens with mortgage interest rates?

Today, mortgage interest can generally be deducted from taxable income. This deduction is an important part of today's home ownership tax. With the abolition of imputed rental value, this deduction for owner-occupied residential property is severely restricted.

In the new system, private debt interest should no longer be able to be deducted to the previous extent. There is an exception for certain first-time buyers of owner-occupied residential property. They should be able to claim a deduction for a limited period of time so that it does not make it even more difficult to get into home ownership.

For existing owners, this means that a large mortgage loses its tax attractiveness. Anyone who has so far deliberately remained heavily indebted in order to deduct interest should review their strategy. After 2029, amortization may become more interesting for tax purposes than before.

Who benefits from abolition?

Owners with low mortgage, low maintenance costs and a high imputed rental value are likely to benefit in particular. This includes many retirees who have largely paid off their house. For them, the imputed rental value today increases their taxable income, while only a small amount of debt interest can be deducted.

Owners with well-maintained properties and little need for renovation can also benefit. If there are hardly any deductible costs, the loss of the imputed rental value is tax-advantageous. However, the effect depends heavily on the canton, income, wealth and property value.

The situation is less clear for owners with a large mortgage or planned maintenance. Anyone who has been able to deduct high debt interest and maintenance costs up to now loses important tax deductions. Therefore, you should not only ask whether the imputed rental value is omitted, but also which deductions are omitted at the same time.

Who could benefit less?

Householders with high indebtedness, large restructuring needs or heavily used maintenance deductions could benefit less. Anyone who today deducts high interest rates and maintenance costs every year will lose tax relief under the new system.

This can be particularly relevant for older houses. If the roof, heating, façade, windows or pipes need to be renovated in the coming years, tax planning can be heavily influenced by the system change. Anyone planning restructuring after 2029 should clarify which deductions are still possible.

Owners of secondary properties must also look closely. Although the imputed rental value is also being abolished there, cantons can introduce new property taxes on second homes. As a result, the tax burden may develop differently depending on the canton.

What applies to second homes?

The reform not only affects first properties, but also secondary homes. The imputed rental value should also be abolished for secondary properties. At the same time, the cantons are given the option of introducing a special property tax on secondary properties.

This is particularly important for cantons with many holiday apartments. Without imputed rental value taxation, significant tax revenue would be lost there. A new property tax can partially compensate for these losses. For owners of holiday homes, it is therefore crucial what the respective canton specifically decides.

Anyone who owns a second home should monitor developments in the local canton. The tax effect of the abolition can be completely different there than in the case of a owner-occupied main residence.

What does the reform mean for buyers?

For buyers, the abolition of imputed rental value changes the long-term calculation. The loss of fictitious income can reduce the tax burden after the purchase. At the same time, interest on debt and maintenance are losing weight for tax purposes.

The question of mortgage amount is becoming particularly important. Until now, a large mortgage was attractive for tax purposes in part because debt interest was deductible. After the system change, lower indebtedness can become more beneficial. Buyers should therefore recalculate financing models.

The choice between direct and indirect amortization may also change. If debt interest yields less tax, the indirect amortization via Pillar 3a will not automatically remain as attractive as before. Nevertheless, it can still be useful because 3a contributions remain tax-advantaged.

What does the reform mean for sellers?

For sellers, the abolition of imputed rental value can indirectly influence the real estate market. If residential property becomes more attractive for tax purposes, demand for private homes can increase. At the same time, buyers can calculate more carefully when maintenance and debt interest deductions disappear.

The reform can play a role in older properties that need renovation. Buyers will check more closely whether renovations after 2029 are still attractive for tax purposes. This can influence price negotiations. A well-maintained property can therefore become relatively more attractive than a house with a high need for renovation.

It is therefore worthwhile for sellers to present the condition of the property transparently. Restructuring certificates, energy performance certificates, maintenance documentation and clear cost information are becoming more important because tax deductions no longer act as a buffer to the same extent.

Should renovations be preferred?

Many owners are wondering whether they should carry out renovations before 2029. The answer depends on the type of work, the canton, tax progression and the actual need for restructuring. Anyone who has planned value-maintaining maintenance work anyway should check the timing.

However, it would be wrong to prefer unnecessary work just because of the tax. A renovation is particularly worthwhile if it is technically necessary, economically viable or energetically important. Tax deductions can influence the decision, but should not determine it alone.

Planning over several tax years is particularly worthwhile for larger projects such as heating replacement, roof renovation, façade insulation or window renovation. The current rules will still apply until the end of 2028. After that, you must comply with the cantonal transitional and special rules.

Should the mortgage be repaid?

The abolition of imputed rental value can change the amortization strategy. Today, some owners keep a higher mortgage because interest on debt is tax deductible. If this advantage ceases to exist or is severely curtailed, lower debt can become more attractive.

But that doesn't mean that everyone should pay off immediately. Anyone who needs liquid funds for renovations, retirement planning, taxes or security should not tie capital into their own home prematurely. Return expectations, pillar 3a, pension fund and retirement also play a role.

A comparative calculation makes sense: tax burden before and after 2029, effective interest costs, available liquidity, pension requirements and long-term housing costs. Only then can it be seen whether repayment, pledge or retention of the mortgage is a better fit.

What is valid until the end of 2028?

The previous system will remain in force until the end of 2028. Owners must continue to declare the imputed rental value. At the same time, the current deduction options remain in principle, provided that the legal requirements are met.

For taxpayers, this means that the tax returns for the years 2026, 2027 and 2028 are still prepared according to the old system. Anyone planning maintenance or deducting interest on debt should continue to comply with the applicable rules. The abolition has no retroactive effect.

The transition is particularly important for multi-year renovation projects. Anyone who distributes work over several years should check which costs are incurred in which tax year and how they are treated for tax purposes.

Common misconceptions about abolition

A common misconception is: From now on, imputed rental value no longer has to be taxed. That is wrong. The abolition has been decided, but will only apply from January 1, 2029. Until then, the imputed rental value remains taxable.

A second misconception is that all owners automatically save taxes. That is also not generally true. If you lose large deductions, you can profit less. The actual effect depends on the mortgage, maintenance, income, canton and personal situation.

A third misconception concerns second homes. There, too, the imputed rental value is lost, but cantons can introduce new property taxes. Depending on the canton, the tax burden for holiday homes may therefore remain relevant.

Practical recommendation for owners

Owners should actively use the years up to 2029. First, your own tax situation should be examined: amount of imputed rental value, mortgage, interest on maintenance, planned restructuring and income. It is then possible to estimate whether the reform is more likely to relieve or burden.

Second, the mortgage strategy should be reviewed. High levels of debt will be less attractive for tax purposes in the future. Nevertheless, amortization must match liquidity and pension planning. Overall planning is particularly useful before retirement.

Thirdly, maintenance and rehabilitation work should be scheduled in time. Anyone who has to carry out major value-maintaining work anyway should check whether implementation before the end of 2028 makes tax sense. Technical requirements, funding, craftsman capacities and cantonal rules should be taken into account.

Conclusion: The imputed rental value is expected to disappear from 2029

The answer to the question When will the imputed rental value in Switzerland finally be abolished? states: As of January 1, 2029. The reform was adopted, the Federal Council has determined the entry into force, and the previous rules will continue to apply until the end of 2028.

The system change is important for owners because it is not only the imputed rental value that disappears. At the same time, many previous deductions are omitted or changing, in particular for property maintenance and private debt interest. The tax effect therefore depends heavily on the personal situation.

Anyone who owns, buys, sells or renovates residential property should use the period until 2029. Good planning includes taxes, mortgage, amortization, renovations, retirement and liquidity. Abolishing imputed rental value is a big step — but it's no reason to lose sight of overall financing.

Glossary for abolishing imputed rental value

Imputed rental value: Fictitious income that owners must tax for owner-occupied residential property.

Home ownership taxation: Tax system for owner-occupied, rented or leased real estate.

Debt interest deduction: Tax deduction for interest on private debt, in particular mortgage interest.

Property maintenance: Value-maintaining costs for a property, which are often tax-deductible in today's system.

Property tax: Possible cantonal tax on secondary properties as a replacement or compensation after the imputed rental value ceases to exist.