System Change in Swiss Residential Property Taxation – What It Means for Homeowners

In the national referendum of September 28, 2025, Swiss voters approved a fundamental reform of the residential property taxation system. This change will significantly affect homeowners, property investors, and those planning to buy a home in the coming years.

At thinkIMPACT Consulting, we help our clients understand and strategically adapt to these shifts — ensuring that both private individuals and investors can maintain optimal financial and tax efficiency in the new environment.

Key Changes at a Glance

1. Abolition of the Imputed Rental Value (Eigenmietwert)
The imputed rental value for owner-occupied residential property — both primary residences and second homes — will be abolished. This marks the end of a system long criticized for taxing a “theoretical” rental income that homeowners never actually receive.

2. Strongly Reduced Deduction for Private Mortgage Interest
The deduction for private debt interest will be limited to a “quota-restricted” deduction proportional to the share of rented or leased properties in the taxpayer’s total assets. The previous additional deduction of up to CHF 50,000 will be abolished.
In practice, homeowners without rental property will no longer be able to deduct mortgage interest — with a small exception for first-time buyers.

3. Transitional Deduction for First-Time Buyers
First-time buyers will benefit from a limited and temporary interest deduction:

• CHF 10,000 per year for married couples

• CHF 5,000 per year for other taxpayers
  This deduction applies for up to 10 years and is reduced annually by 10%. It ceases if the property is sold or no longer owner-occupied.

4. Abolition of Maintenance Cost Deductions
Deductions for property maintenance, insurance premiums, and similar expenses for owner-occupied properties will be eliminated.
However, maintenance costs on rented properties remain deductible.

5. Sustainability Incentives at Cantonal Level
Cantons retain the competence to allow deductions for energy-saving and environmental protection measures as well as demolition costs. On the federal level, these deductions will disappear.

6. New Cantonal Option: Object Tax on Second Homes
Cantons may introduce a specific object tax on second homes to offset potential revenue losses resulting from the abolition of the imputed rental value — especially relevant for tourism regions. Details on implementation and rates are still pending.

What Homeowners Should Expect

The Federal Council will decide when the reform comes into force, allowing cantons time to adapt their tax systems. For many homeowners, these changes will increase their effective tax burden if they have significant mortgage financing and can no longer deduct interest.

For those who have largely repaid their mortgage, the new system may simplify their tax situation and even lead to savings, since the imputed rental value — often higher than the actual costs of ownership — will disappear.

What You Can Do Now

• Review your financing strategy: With limited interest deductions, a new balance between liquidity, investment, and debt reduction becomes crucial.

• Assess property ownership structures: Holding property privately or via an entity may have different implications under the new regime.

• Plan for renovation timing: Energy-efficient renovations might still be deductible at the cantonal level — proper timing can maximize tax advantages.

• Evaluate second-home taxation risks: Especially in cantons with high tourism exposure, an additional object tax may apply.

thinkIMPACT Consulting – Strategic Guidance for the Transition

At thinkIMPACT Consulting, we specialize in helping clients navigate financial transitions — including major tax reforms like this one. We combine over two decades of experience in wealth management, tax structuring, and retirement planning to help you make informed, forward-looking decisions.

We assess your individual situation and develop a tailored strategy to ensure that your financial and real estate portfolio remains efficient, compliant, and future-ready.

Let’s turn change into opportunity — together.