Tax deduction: how to deduct and how much?

• Tax deduction: what exactly are we talking about?
• Imputed rental value: the starting point for property deductions
• Which maintenance costs can you deduct?
• What cannot be deducted: when maintenance becomes an investment
• Why energy renovations are an exception
• Actual or lump-sum costs: how to choose?
• How much can you really deduct and what impact on tax?

In Switzerland, tax deductions are often seen as a mere administrative detail. Yet this mechanism can sustainably reduce the tax burden. Because many taxpayers do not know exactly what they can deduct, within what limits and under which rules, they miss out on deductions that are nevertheless allowed.

So how does the tax deduction really work? Which expenses are actually deductible? And above all, how much can you expect to save ? This article provides a clear, practical overview to help you see things more clearly and avoid the most common mistakes.

Tax deduction: what exactly are we talking about?

Before going into detail on deductible expenses, let us revisit the overall logic of the tax deduction. In Switzerland, tax is not calculated only on the income received, but on taxable income, i.e. income after deducting certain expenses recognized by the tax authorities.

A deduction corresponds to an expense the State accepts to take into account because it is considered necessary, justified, or directly linked to taxed income. These amounts therefore reduce the base on which the tax is calculated: the lower this base, the lower the final tax.

Here we are talking about expenses that are “materially” linked to the property, and not the mortgage interest deduction . Not all expenses are therefore deductible, and the central criterion is neither the amount spent nor the taxpayer’s good faith, but the link between the expense and the taxed item. This principle explains why some everyday costs are excluded, while others (sometimes less intuitive) are accepted.

It is also important to distinguish between two levels:

• deductions that apply to income (professional expenses, mortgage interest, maintenance costs, etc.);
• those that concern assets, in particular in the context of owning a property.

Imputed rental value: the starting point for property deductions

When an owner occupies their own home, they obviously receive no rent. Yet, for tax purposes, this home is considered an economic benefit. The authorities assume that living in your own property amounts to benefiting from rent you do not have to pay. This theoretical amount is what corresponds to the imputed rental value.

This imputed rental value is added to taxable income. It is set by the canton based on criteria such as the home’s location, its surface area, or its overall condition. So even though it is often below market rents, it still increases the tax to be paid.

C’est précisément pour cette raison que certaines charges liées au logement peuvent être déduites. Les maintenance costs sont admis parce qu’ils viennent compenser un taxable income fictif : la imputed rental value. Autrement dit, si un logement est imposé comme s’il générait un revenu, les dépenses nécessaires pour le maintenir en état peuvent être prises en compte.

In 2025, a federal vote was held on this topic. The people chose to supprimer la imputed rental value (taxation on this fictitious rent). The impact is significant because certain deductions may no longer be allowed.

Which maintenance costs can you deduct?

For maintenance costs to be accepted as a deduction, the tax authorities are interested neither in the added comfort nor in the amount of the work, but in its purpose. La règle est donc simple : seules les dépenses destinées à maintenir le logement dans son état initial peuvent être déduites du taxable income.

These are the works necessary to preserve the normal use of the property and avoid its deterioration over time. In practice, this concerns routine interventions linked to the home’s natural wear and tear. For example: painting work, repairing a heating system, replacing faulty equipment, or maintaining outdoor areas.

Ces dépenses sont considérées comme déductibles parce qu’elles sont directement liées à un bien dont l’usage est déjà imposé via la imputed rental value. Elles ne modifient pas durablement le logement, mais permettent simplement de le conserver en état.

À l’inverse, dès lors qu’un travail améliore le confort, augmente la surface ou rehausse le standing du bien, il ne relève plus de l’entretien. Ces dépenses sont alors traitées comme des investissements et ne peuvent pas être déduites du taxable income, même si elles répondent à un besoin personnel légitime.

Common work related to wear and tear

As mentioned, deductible maintenance costs correspond to work made necessary by the property’s normal wear and tear.

This may include, for example, interior painting, restoring a damaged floor, repairing a heating system, or replacing built-in equipment that has become faulty. As long as this work does not result in a lasting improvement to the property, it is considered maintenance for tax purposes.

Interior, exterior and equipment: the same logic

The tax logic is the same whether it concerns the inside of the home or its surroundings: garden maintenance, repairing a fence, cleaning, or partially refurbishing the façade may therefore be accepted as a deduction, provided they aim to maintain the existing condition.

Similarly, the technical installations of the home (boiler, sanitary installations, built-in household appliances) fall under maintenance when they are repaired or replaced like for like.

Additional costs and expenses related to maintenance

Certain indirect costs can also be deducted when they are directly linked to the maintenance of the home. This is the case, for example, for fees paid to professionals, inspection costs, or mandatory maintenance contracts.

What cannot be deducted: when maintenance becomes an investment

For tax purposes, the determining criterion remains the impact of the work on the home.

Work is considered an investment in particular when it increases the living area, significantly improves comfort, or raises the home’s standard. Creating a conservatory, installing a sauna, or converting an attic into living space fall into this category because they transform the property.

It is important to note that the fact that equipment is new is not enough to make it non-deductible. The analysis is always made in relation to the home’s previous state: a like-for-like replacement is maintenance, whereas a technical or qualitative upgrade is treated as an investment.

These expenses are not without tax interest, however. Investments that increase the property’s value can, in many cases, be taken into account when calculating the real estate capital gains in the event of resale. In other words, if they do not reduce tax today, they can mitigate its impact over the longer term.

Why energy renovations are an exception

Thermal insulation, replacing a fossil-fuel heating system with a more efficient one, or installing solar panels… Even though they can increase the home’s value, some of this work remains deductible in order to encourage improvements in buildings’ energy performance.

The construction of eco-friendly buildings is a different topic, because subsidies and the related mortgage are naturally determined before any maintenance costs arise.

For energy renovations, only the amounts actually paid by the owner can be deducted. When part of the work is financed by subsidies, that portion cannot be taken into account for tax purposes, because it was not borne by the taxpayer. It is therefore important to distinguish what was paid personally from what was covered by public support.

Actual or lump-sum costs: how to choose?

When it comes to declaring maintenance costs, two options are available to the owner: deduct actual costs or opt for a lump-sum deduction. The choice is made each year, and it is never final.

The lump-sum deduction corresponds to an amount automatically calculated by the tax authorities. It is intended to cover routine maintenance costs without the need to provide supporting documents. This option is often sufficient when little work was carried out during the year.

By contrast, actual costs are based on expenses actually incurred. They allow you to deduct the exact amount of maintenance work, provided you can present invoices and proof of payment. This option becomes attractive as soon as the work exceeds the lump-sum amount.

How much can you really deduct and what impact on tax?

Deducting maintenance costs does not mean getting their amount back, but reducing the income on which tax is calculated. In other words, the higher your tax rate, the greater the effect of the deduction. Conversely, the same deduction will not have the same impact for two households in different tax brackets.

Let’s take a simple example. An owner who deducts CHF 10,000 in maintenance costs will not see their tax decrease by CHF 10,000. However, those CHF 10,000 will reduce their taxable income. If their marginal tax rate is 30%, the tax saving will be around CHF 3,000. The mechanism is the same, whatever the amount of the work.

You should also keep in mind that the impact varies depending on several factors:

• the household’s total income,
• the canton of residence,
• family situation,
• and the nature of other deductions already applied.

That is why there is no “ideal” amount to deduct. The goal is not to multiply expenses, but to declare correctly those that are allowed, at the right time, and using the most advantageous method.