Renovation fund: a complete guide for Swiss condominiums (PPE)

• What is a renovation fund in a Swiss PPE?
• Which parts of the building are concerned?
• Renovation fund and legal requirements in Switzerland
• The proposed 2026 reform of Swiss condominium law
• How much should be paid into the renovation fund each year?
• Concrete simulations by size of the PPE
• How are decisions about the fund taken?
• Renovation fund and taxation

In a condominium, the main issues rarely lie inside the individual apartments, but in the management of the common parts. The roof, façade, technical installations and lifts are all elements whose upkeep and renovation concern the entire PPE, often involving substantial amounts.

The question of the renovation fund usually arises when the first major works are planned. If such works have not been anticipated, the call for additional contributions can be heavy and become a source of tension or deadlock between co-owners. Conversely, a PPE that has built up sufficient reserves over time enjoys much more room for manoeuvre when it comes to deciding and acting. This reserve also facilitates obtaining or renewing a mortgage loan, as lenders see it as a sign of prudent management.

This guide explains how the renovation fund works, the legal framework under Swiss law and the contribution levels most commonly used in practice. It provides concrete benchmarks – including tax aspects – to help co-owners adapt their decisions to the reality of their building.

What is a renovation fund in a Swiss PPE?

The renovation fund is a financial reserve built up by all co-owners in a PPE. Its role is to provide funding, when the time comes, for major works affecting the common parts of the building.

The fund is financed through regular contributions from each co-owner, usually via the condominium charges, in proportion to their quota share. These amounts are paid into a separate account in the name of the condominium and may only be used for clearly defined works. The fund is therefore not intended to cover day-to-day maintenance, but to anticipate larger, long-term expenditure.

Amounts paid into the renovation fund remain among the assets of the condominium owners’ community. When a unit is sold, there is no separate individual fund balance automatically refunded to the seller or transferred to the buyer: the fund remains with the community. The seller generally cannot reclaim previous contributions. Existing reserves, approved works and potential additional payments should therefore be considered when negotiating the purchase price.

Which parts of the building are concerned?

The renovation fund is intended exclusively for the common parts of the building. It does not finance works carried out inside private units, but those that affect the condominium as a whole, regardless of how each co-owner uses these areas.

Common parts are generally those elements that ensure the structure, safety and proper functioning of the building. According to Article 712b paragraph 2 of the Swiss Civil Code, these include in particular: 

• the roof, façades and load-bearing walls
• technical installations (heating, ventilation, pipes)
• circulation areas (stairwells, entrance halls, corridors)
• lifts, boiler rooms, technical rooms and shared laundry rooms
• the parts of the ground that do not form a building

The boundary between common and private parts is not always clear-cut. A key role here is played by the administration and use regulations (RAU), often referred to as the “PPE regulations”. They may clarify the status of specific elements – such as balconies, terraces, gardens or windows – and define to what extent their maintenance or renovation falls to the community or to the individual co-owner.

Renovation fund and legal requirements in Switzerland

The same question regularly comes up at co-owners’ meetings or when buying a unit: is a renovation fund compulsory in a PPE?

Swiss law on condominium ownership, as set out in Articles 712a et seq. of the Civil Code, does not impose any explicit obligation to create a renovation fund. The law defines the principles of condominium ownership, the allocation of costs and the decision-making rules, but leaves co-owners broad discretion as to the financial organisation of their PPE.

In other words, from a strictly legal point of view, a condominium can operate without a renovation fund. This freedom explains why some PPE – in particular newer buildings – choose not to set one up immediately or to keep it at a low level during the first years.

However, the absence of a legal obligation does not mean that a renovation fund is unimportant. Over time it has established itself as a hallmark of sound management. Property managers, administrators and many owners’ associations recommend setting up such a fund from the early years of the condominium.

In practice, a PPE without a renovation fund is often perceived as more exposed to financial difficulties. Decisions relating to works may become more complicated in the absence of reserves, and co-owners may face substantial one-off contributions. This can also raise questions in the event of a sale, both for potential buyers and for lenders.

The proposed reform of Swiss condominium law in 2026

On 13 May 2026, the Swiss Federal Council adopted a bill and explanatory message for Parliament to modernise condominium ownership law. One proposal would allow co-owners, in certain circumstances, to ask a court to order the creation of a renovation fund where the community has failed to build adequate reserves for necessary works. Source: Swiss Federal Office of Justice.

As at 17 October 2026, this is a legislative proposal, not an enforceable right already in force. The Federal Council has not proposed an automatic fund requirement for every condominium. The final provisions and commencement date depend on the legislative process.

Why renovation funds are standard in practice

All buildings ultimately face similar renovation needs. Structural elements and technical installations have a limited lifespan, and the first major renovation works usually become necessary after twenty to thirty years.

Where a renovation fund has been set up in advance, these works can be tackled gradually and in a planned way. Co-owners already have a reserve, making it possible to plan interventions, compare bids and decide without immediate financial pressure. Discussions can then focus on the scope and quality of the works rather than on each person’s ability to pay.

Without a fund, the PPE is in a more delicate position. Some co-owners may struggle to keep up, which can lead to postponement of works or to decisions driven more by short-term financial constraints than by the long-term interests of the building.

A concrete advantage when selling

Prospective buyers and mortgage lenders may review the fund’s financial position. Reserves supported by a documented maintenance plan can help assess planned works and possible additional contributions. They do not, however, guarantee that there will be no unexpected costs or that a mortgage will be approved.

A well-funded reserve may support a seller’s negotiations, but it does not guarantee a higher sale price. Buyers should compare the reserve with scheduled renovation expenditure and include potential extra payments in their overall budget and purchase costs.

How much should be paid into the renovation fund each year?

There is no single amount that applies to all PPE. The appropriate level of contributions depends closely on the characteristics of the building and the choices made by the co-owners. That said, certain ranges are commonly used as benchmarks and help structure the discussion.

As a broad guide, Swiss property professionals sometimes refer to annual contributions of around 0.2% to 0.5% of the building’s insured value. This range alone cannot establish whether the fund will cover the building’s future works.

This indicative range also appears in guidance from the Swiss real estate association SVIT. It is a benchmark, not a legal requirement. Suitable contributions require a comparison of the building’s condition, planned works, existing reserves and possible cash calls. These payments also affect a buyer’s mortgage affordability.

Key factors that influence contribution levels

Several factors determine the appropriate contribution level to the renovation fund: 

• Age of the building: A recent building whose main components are still under warranty can start with more modest contributions. An older building must anticipate more imminent and more costly renovation works.
• Condition of technical installations: The presence of a lift, central heating, mechanical ventilation or other specific equipment increases the future need for renovation. Where major works have already been carried out (roof renovation, replacement of the heating system), this may justify a temporary adjustment of contributions.
• Size of the PPE: In a small condominium, each financial decision has a more visible impact on every co-owner, often calling for more cautious planning. In larger complexes, the burden can be spread across more units.
• Past decisions of the co-owners: A PPE that has long underfunded its renovation reserve may need to accept higher contributions for a period to catch up. A technical building survey, ideally combined with a Swiss building energy certificate (GEAK/CECB) (assessment of the thermal quality of the building envelope), provides an objective basis for setting contributions according to real, rather than approximate, needs.

What target amount should you aim for in the long term?

Rather than setting a universal target percentage, the priority is to establish which works are needed, when and at what cost. A fund amounting to 6%–8% of the building’s insured value is not necessarily sufficient: the condition of the building, replacement cycles and construction costs matter more.

Illustration only: at a steady annual contribution of 0.3% of insured value, total deposits would equal 6% after 20 years or 9% after 30 years, assuming no withdrawals, interest or cost increases. This arithmetic does not establish that the reserve will cover the actual renovations.

Some communities set a cap on the fund in their regulations. Such caps should be reviewed as major renovation projects approach: automatically reducing contributions can leave a shortfall just when the property needs significant investment.

Concrete simulations by size of the PPE

The percentages mentioned above can feel somewhat abstract. The table below translates them into concrete amounts for three typical situations, assuming an annual contribution of 0.3% of the insured value. The amounts are provided for illustrative purposes only, before allocation according to each co-owner’s quota share.

Simplified examples assuming equal shares per apartment. Actual contributions are generally allocated by ownership quota and the applicable rules.

The table shows contribution amounts, not the community’s true funding capacity. For the 20-unit example, steady annual contributions of CHF 30,000 would add up to CHF 600,000 over 20 years, before withdrawals, interest and inflation. Without a renovation schedule, this does not mean that additional cash calls can be ruled out.

In a small PPE, the monthly amount per co-owner may seem significant. However, it allows reserves to be built up gradually, whereas a one-off call for funds to finance major works could otherwise amount to several tens of thousands of francs per unit.

Will the fund cover the next eight years? A worked example

A community with ten apartments of equal ownership shares currently has CHF 120,000 in its fund and contributes CHF 15,000 a year in total. Roof repairs costing CHF 160,000 are planned for the end of year four, followed by a CHF 180,000 heating-system replacement at the end of year eight.

• End of year 4: CHF 120,000 + 4 × CHF 15,000 − CHF 160,000 = CHF 20,000 remaining.
• End of year 8, before replacing the heating system: CHF 20,000 + 4 × CHF 15,000 = CHF 80,000 available.
• Funding shortfall: CHF 180,000 − CHF 80,000 = CHF 100,000, equivalent to CHF 10,000 per apartment if all shares are equal.

This deliberately excludes interest, inflation, grants and other spending. It shows why a fund that looks healthy today may conceal a predictable financing gap. The community can respond by increasing annual contributions in advance, rescheduling works or preparing a financing solution.

How are decisions about the renovation fund taken?

Decisions concerning the fund are taken by the co-owners at the condominium owners’ meeting. Within the powers and procedures laid down by law and the community’s regulations, the meeting decides on contributions and the use of accumulated reserves.

In practice, the GM generally rules on the following aspects: 

• the principle and level of annual contributions
• the works to be financed and the planned timetable
• when the fund can be drawn on

The property manager prepares proposals and implements decisions. Certain routine expenditure or urgent action may fall within specific delegated powers; not every payment necessarily requires a fresh vote by the general meeting.

The creation and funding of a reserve must comply with the regulations and the applicable legal voting requirements. It would be misleading to claim that a simple majority is always enough. Validly approved contributions bind all co-owners, including those who opposed the decision; outstanding payments may be pursued.

The vote required to authorise building works depends on their legal classification. Articles 647c–647e of the Swiss Civil Code distinguish necessary, useful and purely decorative works. Having money in the fund does not itself authorise a project, and statutory protections cannot simply be set aside by a meeting vote.

• Necessary works (Art. 647c CC): measures to preserve the building’s value or usability, such as essential roof repairs; generally require the majority of all co-owners unless the work falls within ordinary administration.
• Useful works (Art. 647d CC): alterations that improve utility or increase value; require a majority of all co-owners representing more than half the ownership shares. Additional protection may apply where individual owners are seriously affected.
• Purely decorative or convenience works (Art. 647e CC): generally require unanimity, subject to a narrowly defined statutory exception involving a qualified majority, safeguards for dissenting owners and allocation of certain costs.

Having a renovation fund does not mean that all project costs must necessarily be covered by the existing reserve. Depending on the amount available and the scope of the works, the general meeting may decide to complement the fund with additional one-off contributions. The fund nevertheless helps reduce the extra effort required and spread the financial burden more fairly.

Renovation fund and taxation

The tax treatment of a renovation fund depends on the tax concerned, the canton where the property is located and what the fund is actually used for. Current rules must also be distinguished from the changes scheduled for 2029. See our guide to imputed rental value.

• Direct federal income tax until the end of 2028: contributions earmarked exclusively for deductible maintenance of common building installations may qualify as actual property maintenance expenses. Expenditure that increases value is not automatically deductible. Taxpayers choosing a lump-sum maintenance deduction cannot additionally claim the same contributions. Source: Swiss Federal Tax Administration.
• Cantonal and communal taxes: treatment varies. In Vaud, contributions themselves are generally not deductible, while qualifying maintenance subsequently paid for through the fund may be eligible under cantonal rules. In Fribourg, contributions earmarked exclusively for maintenance of common facilities may be deductible under certain conditions. The same cost must not be deducted twice.
• Energy-efficient renovation: tax relief depends on the type of work, grants received and legislation in force. An upgrade or increase in value does not automatically give rise to a deduction.
• Wealth tax: whether co-owners must declare a calculated share of the fund depends on cantonal instructions and the tax classification of the asset. The manager’s annual statement is useful evidence, but a single rule cannot safely be applied across every canton.
• Grants and subsidies: Energy renovation works may qualify for support programmes. Some schemes require an application before works begin; check eligibility and deadlines before signing contracts.

What changes on 1 January 2029?

The Federal Council has fixed 1 January 2029 as the commencement date for abolishing the taxation of imputed rental value. For owner-occupied homes, deductions for maintenance costs will generally disappear at federal, cantonal and communal levels. Maintenance deductions will broadly remain available for rented or leased properties. Cantons may retain certain energy-efficiency deductions for a limited time. These rules will also affect the possible tax benefits of renovation-fund contributions. Source: Federal Tax Administration, 1 April 2026.

Renovations should not be brought forward purely to obtain a tax deduction. First assess technical needs, the community’s decision-making requirements, available cash and each owner’s individual tax position.

Keep the property manager’s statements, contribution records, meeting resolutions, invoices and evidence of grants. It is particularly important to distinguish deductible maintenance from improvements that increase value and to avoid double deductions.