What are the effects of abolishing imputed rental value in Thurgau?

The 3-point orientation

• The referendum on September 28, 2025 decided to abolish the imputed rental value with 57.7 percent in favour. The new regime will come into force on January 1, 2029, after a transition period until the end of 2028.
• For owner-occupied first and second properties, the imputed rental value is waived -- in return, however, the maintenance cost deductions at federal level and the debt interest deduction are omitted. There are exceptions for leased properties and initial purchases.
• Cantonal implementation in Thurgau is still pending. Open questions relate in particular to a possible property tax on secondary properties and the specific structure of cantonal deduction regulations.

What is the imputed rental value -- and why was it abolished?

The imputed rental value is a fictitious income that has been credited to homeowners as taxable income for decades. The logic behind this: Anyone who lives in their own home saves rent - and this monetary advantage should be taxed. In return, homeowners were allowed to claim numerous deductions: mortgage interest, maintenance costs, renovation expenses. This system, unique by international standards, was regarded by many as outdated, unfair and excessively complicated. The referendum of September 2025 put an end to this -- with a clear majority.

The timetable: When does something change?

The transition phase is clearly defined, even though cantonal implementation still leaves room for manoeuvre:

• September 28, 2025: Popular vote -- 57.7% in favour
• 2026--2028: Transition phase -- the current system remains in force, cantons are working on implementation
• January 1, 2029: Entry into force of the new regulation at federal level
• From 2029: Cantonal adjustments come into force in parallel or in stages

For the canton of Thurgau, this means that cantonal legislation must be amended by the end of 2028. Specific drafts are not yet available, but the tax administration of the Canton of Thurgau has announced that it will press ahead with the work quickly.

What falls away -- and what remains?

The reform is not just the removal of a tax item -- it changes the entire deduction logic for homeowners. The following table provides an overview of the most important changes:

Winners and losers: Who really benefits?

The abolition of imputed rental value is not a gift to all owners equally. Who wins and who loses depends largely on the individual situation.

winner:

• Owners with a paid or largely amortized mortgage: Until now, you have taxed the imputed rental value without being able to deduct significant debt interest. For them, a pure tax item is omitted -- the relief can amount to several thousand francs per year.
• Pensioners with debt-free homes: They are among the main beneficiaries of the reform. Your taxable income drops noticeably.
• Owners with low imputed rental value relative to actual market rent: They have so far taxed an amount that was below the real utility value -- the advantage of abolition is the greatest for them.

Loser:

• New buyers with a high mortgage burden: Anyone who has been able to deduct high debt interest rates up to now loses this advantage. With a mortgage of one million francs and an interest rate of 2 percent, there is no deduction of 20,000 francs per year.
• Owners facing major renovations: Anyone planning a complete restructuring in the next few years will lose the opportunity to claim maintenance costs for tax purposes. Strategically, it could make sense to bring planned renovations forward to the transition phase.
• Owners of secondary properties: A possible property tax is imminent here, the structure of which is still open.

Open questions in Thurgau

The federal regulation provides the framework -- but cantonal implementation poses its own challenges:

• Property tax on secondary properties: The federal government allows the cantons to levy property tax on secondary properties. Whether and how Thurgau will make use of this is still an open question. For municipalities with a high share of second homes -- such as on Lake Constance -- this would be a relevant source of income.
• Cantonal maintenance expenses deductions: While the federal deduction is abolished, cantons could maintain or create new regulations of their own. Thurgau has not yet positioned itself on this.
• First-time acquiring regulation: The exception to debt interest deduction for first-time acquirers is limited in time and has not yet been fully defined in detail. For the Thurgau real estate market, which depends heavily on first-time buyers, this question is of particular importance.
• Intercantonal vote: Since Thurgau attracts many commuters from the canton of Zurich, the tax regulations of both cantons must be coordinated in order to avoid double burdens or unintentional loopholes.

What Thurgau owners should do now

The transition period until the end of 2028 is not a time of waiting — it is a planning phase. Specifically, the following steps are recommended:

• Review tax planning: Have a specialist calculate your tax situation -- both for the current system and for the new system. The comparison shows whether you are among the winners or losers of the reform.
• Prefer renovations: Anyone planning an energy-efficient renovation or major maintenance work should check whether implementation before January 1, 2029 is more tax-advantageous.
• Adjust payback strategy: Without deduction of debt interest, the calculation for mortgage amortization changes fundamentally. A faster repayment can now make more tax sense.
• Follow cantonal development: As soon as Thurgau presents its cantonal implementation, owners should review the details and adjust their planning.

Common misconceptions

• “The imputed rental value is immediately lost.” -- No. The transition phase will run until the end of 2028. Until then, the previous system will remain unchanged. The new regulation will not apply until January 1, 2029. Anyone who omits the imputed rental value from the 2026 tax return will receive a correction.
• “Without imputed rental value, I automatically save taxes.” -- Not necessarily. Anyone with high mortgage liabilities and has so far generously deducted interest and maintenance costs may be worse off under the new system than before. The reform is a zero-sum game with individual winners and losers.
• “The Canton of Thurgau simply adopts the federal regulation.” -- Not automatically. The cantons have leeway when it comes to implementation, in particular when it comes to deductions from maintenance costs and property tax on secondary properties. The cantonal regulation in Thurgau is still pending and may deviate from the federal requirement.

Conclusion: A reform with light and shadow

The abolition of imputed rental value is the biggest tax reform for homeowners in decades — and it is anything but one-dimensional. For Thurgau owners with paid off homes, it provides a welcome tax relief. On the other hand, for new buyers with a large mortgage or owners before major renovations, the balance sheet may be negative. Cantonal implementation will be decisive: How Thurgau regulates the outstanding issues -- in particular property tax and maintenance deductions -- will determine how the reform actually works locally. Every owner should use the transition phase until the end of 2028 to review their own tax strategy and adjust it in good time.

Glossary on abolishing imputed rental value in Thurgau

• imputed rental value: A fictitious income that is counted as taxable income for homeowners. It corresponds to the amount that you could earn as rent if you were to rent out the property instead of living in it yourself.
• Debt interest deduction: The ability to deduct interest on mortgage liabilities from taxable income. From 2029, only possible for leased properties and for a limited period of time for first-time buyers.
• Maintenance cost deduction: Tax deductibility of expenses for maintenance and renovating a property (e.g. new heating, roof repair). Not applicable at federal level from 2029.
• Property tax: A possible tax that cantons can levy on secondary properties in order to partially compensate for the loss of imputed rental value in second homes.
• transitional phase: The period between the referendum (September 2025) and the entry into force of the new regulation (January 2029), during which the previous system applies and the cantons prepare to implement it.
• amortization: The gradual repayment of a mortgage debt. Without deduction of debt interest, a faster amortization can make sense for tax purposes.
• First purchase: The purchase of residential property for the first time. For first-time buyers, there is a temporary exemption from debt interest deduction even under the new system.
• Second property: A property that is not used as a main residence -- such as a holiday home or a holiday apartment.