Rental Value: What Buyers Need to Know
- Context : what is the imputed rental value ?
- Status : how far along is the abolition of the imputed rental value ?
- What this changes for you in Switzerland
- Numeric scenarios with and without the imputed rental value
- Steps to decide and optimize your strategy in Switzerland
- Mistakes to avoid
- Potential advantages of the abolition
- Frequently asked questions (FAQ)
The imputed rental value – sometimes called imputed rental income or a deemed rent – has long been a pillar of taxation for owner-occupiers in Switzerland. Following the federal vote on 28 September 2025, the framework is changing : the abolition of this tax was approved at the national level, with significant consequences for your budget, your deductions and your mortgage decisions in Switzerland. This article offers a clear, numbers-based, decision-oriented guide to understand the impacts and prepare your next steps.
Context : what is the imputed rental value ?
The imputed rental value is a theoretical amount treated as rental income imputed to the owner who lives in their own home. It reflects the rent they “would pay themselves” and is added to taxable income. In return, the previous system allowed certain deductions : mortgage interest, maintenance costs on a flat-rate or actual basis, and in some cantons energy-related expenses.
Why did this tax exist ?
The historical objective was to ensure a degree of tax neutrality between tenants and owner-occupiers : if a tenant pays a non-deductible rent, the owner-occupier should not be fully advantaged by interest deductibility without a counterweight. The imputed rental value was intended to balance this asymmetry.
Useful terminology
- Taxable imputed rental value : theoretical, taxable amount for the home occupied by its owner.
- Imputed rental income : equivalent wording, often used in general explanations.
- Tax base linked to own use : doctrinal scope of the concept.
Status : how far along is the abolition of the imputed rental value ?
On 28 September 2025, the Swiss people and a majority of cantons approved the reform ending taxation of the imputed rental value for owner-occupiers, as part of a legislative package that also includes a cantonal tax on second homes. The actual entry into force depends on federal and cantonal implementing measures. As of this update, the official timetable has not yet been published : several communications mention implementation from the 2028 tax period, subject to regulatory confirmation.
Official dates and milestones (summary)
- Popular and cantonal approval : 28 September 2025 (majority “yes”).
- Federal framework : reform of housing property taxation, with abolition of the imputed rental value and redefinition of deductions.
- Entry into force : to be set by the Federal Council and coordinated with the cantons.
What this changes for you in Switzerland
The abolition of the imputed rental value shifts the balance between taxable income and deductions. Three mechanisms will affect your situation :
- End of taxation of the deemed rent for the primary residence.
- Revision of deductions : limitation or gradual removal of the deductibility of mortgage interest and maintenance costs (depending on implementation).
- Cantonal differences : cantons retain room for manoeuvre in application, notably for second homes and any related levies.
Winners and more sensitive cases
- Low-debt owners (e.g., retirees who have amortized a large share of the mortgage) : elimination of the taxable deemed rent while their interest deductions were already modest.
- Highly indebted households : the reduced deductibility of interest may lower the net tax advantage, especially in the early years of a financing.
- Energy-efficiency projects : certain incentives (deductions/aid) could be adjusted locally.
Second homes, mixed use and rental properties
- Second homes : introduction of a dedicated cantonal tax. Anticipate the combined effect on your net tax burden.
- Mixed use (private/professional share) : a clear allocation of areas and costs remains essential.
- Rental properties (investment) : no imputed rental value in the strict sense ; actual rental income remains taxable, with specific rules for expenses and depreciation.
Example calculation of the imputed rental value in the Canton of Vaud
You will find a good example here and all the details in the Canton of Vaud brochure.
Steps to decide and optimize your strategy in Switzerland
1) Take stock
- Income and stability : salaries, bonuses, ancillary income (see our 8 best tips)
- Mortgage : structure 1st/2nd rank, maturities, index (SARON vs fixed).
- Safety buffer : maintain a cushion of 3 to 6 months of expenses.
2) Review your rate structure
Compare the appeal of a more flexible SARON with a partial or segmented fixed rate. The reduced tax attractiveness of interest may shift the financial equilibrium point toward predictability rather than purely tax-driven optimization.
3) Plan amortization
If the benefit of the interest deduction decreases, it may become relevant to accelerate amortization (depending on liquidity and horizons). Take care not to drain your cash or your pension pillars.
4) Prioritize maintenance work
As maintenance-deduction regimes may evolve, prioritize interventions with strong energy impact and asset value, checking the applicable cantonal regulations.
5) Plan for a second home
If you own or are considering a second home, factor the effect of the dedicated cantonal taxation into the total cost of ownership. Policies may vary between cantons : follow official announcements.
Mistakes to avoid
- Deciding solely on tax criteria : your financial security takes priority.
- Neglecting the liquidity buffer : it must remain sufficient after any trade-off.
- Switching everything to fixed at the same maturity : diversifying maturities can smooth risk.
- Ignoring cantonal specificities : [Lieu] and its canton may apply different rules.
Potential advantages of the abolition
- Simplification for owner-occupiers : disappearance of the taxable deemed rent.
- Budget clarity : less dependence on optimizing deductible interest.
- Potentially strengthened neutrality between low- and highly-indebted profiles (depending on final parameters).
Frequently asked questions (FAQ)
Does the abolition also apply to second homes?
The reform provides a specific coordination with cantonal taxes on second homes. Follow your canton’s communications for detailed arrangements in [Lieu].
When does the reform take effect?
The effective date will be set by the Federal Council. As of today, several sector analyses mention a possible horizon starting with the 2028 tax period, subject to implementation steps and cantonal coordination.
What happens to interest deductions?
The trend points toward a gradual limitation/abolition for owner-occupiers, with variations depending on the final implementation. The details will depend on the implementing texts and cantonal decisions.
What about maintenance costs?
Adjustments are expected. Depending on the approach adopted locally, the flat rate/actual costs could be redefined. The aim is to avoid purely tax-driven incentives disconnected from actual use.
I am highly indebted: will I be penalized?
You will no longer be taxed on the imputed rental value, but the reduced deductibility of interest may lower the net advantage. Hence the value of a personalized assessment.
I am nearing retirement: is this favorable?
Low-debt owners, numerous at the time of retirement, could benefit from the end of the taxable deemed rent while having few interest expenses to deduct. To be confirmed depending on your canton.
What about a rental property (investment)?
The imputed rental value does not apply to rented properties: actual rents remain taxable, with their respective expense rules.
Should I repay my mortgage faster?
This choice depends on your liquidity, your goals and the new tax balance. Model different amortization paces with a local specialist.
What should I do if I’m planning energy upgrades?
Prioritize works with strong performance gains and check the cantonal aid/deduction regimes that remain or evolve with the reform.
Does my self-employed status change the picture?
For mixed use (private/professional), clarify areas and costs. The rules governing professional use remain decisive
Getting support in Switzerland
Your situation is unique. A short conversation helps identify your room for manoeuvre, compare several structures (SARON/fixed/segmented) and anticipate cantonal effects.
Conclusion
The abolition of the imputed rental value reshuffles the deck for owner-occupiers in [Lieu]. Less taxable deemed rent, but more measured deductions : the financial trade-off shifts toward budget stability, the right rate structure and a sustainable amortization pace. Take the time for a personalized assessment to secure your decisions. Get a personalized analysis
Official sources and reference pages
- Federal Department of Finance (FDF) — Reform of the taxation of home ownership
- Confederation — Voting page for 28.09.2025
- Canton of Geneva — Abolition of the imputed rental value (29.09.2025)
Disclaimer : General, indicative information that does not constitute tax, legal or financial advice. Rules and deductions vary between the Confederation and the cantons and may change. No rate promise. Before making any decision, request a personalized analysis from an expert in [Lieu].
