Imputed rent is going: when should you renovate?

What the change of system means

On 28 September 2025, Swiss voters and cantons approved the reform of home ownership taxation. Before the vote, the Confederation had said it would not enter into force before 2028. The Federal Council sets the exact date. Once the reform is in force, owner-occupied homes will no longer be taxed on a notional rental value (imputed rent, Eigenmietwert), whether primary or secondary residences.

Who gains and who does not

Whether you pay less or more tax under the new system depends mainly on three factors: the size of your mortgage, the interest rate level and your annual maintenance costs.

• Likely to benefit: owners with a small or fully repaid mortgage and a well-maintained house. The imputed rent disappears from their income while they lose few deductions.
• Likely to pay more: owners with a large mortgage, especially if rates rise, and owners of older properties with major renovation needs.
• Hard to assess: owners of second homes, because the burden depends on whether and how their canton introduces a special property tax.

A reliable answer for your case requires a calculation with your own figures. General rules of thumb are of little help here.

Timing renovations properly

Until the change of system, maintenance costs and energy-related measures remain deductible under current law. If you are planning work in the next few years anyway, such as replacing the heating, renovating the facade or roof, new windows or a bathroom refurbishment, it is worth checking whether bringing it forward pays off.

• Which date counts, whether invoice, payment or completion of the work, depends on cantonal practice.
• Only value-preserving costs are deductible, not value-enhancing investments. Conversions are often split between the two.
• Subsidies, for example from the national Buildings Programme, reduce the deductible amount.
• Spreading larger works over several tax years can reduce the effect of progressive rates.

A renovation is not worth doing for the tax deduction alone, but a necessary project can become cheaper through smart timing.

Planning for the expected renovation rush

Industry observers expect many owners to want their projects completed before the change of system. Planners, trades and permit authorities are therefore likely to be busier, which may affect waiting times and possibly prices.

1. Record the condition of the property and rank measures by urgency.
2. Have a specialist roughly calculate the tax impact.
3. Clarify whether a building permit or notification is required and allow for the deadlines.
4. Check federal, cantonal and municipal subsidy programmes and apply before work starts.
5. Obtain several quotes and fix dates in the contract.
6. Settle the financing with your bank before awarding contracts.

For larger projects, a general planner or an architecture firm with site management can make coordination easier. More important than the organisational set-up is a realistic schedule with buffers.

Rethinking mortgage and amortisation

Under the current system, a large mortgage was often attractive for tax purposes because the interest offset the imputed rent. If the interest deduction largely disappears, that argument loses weight, and paying down more of the mortgage may become more interesting.

• Check whether indirect amortisation via pillar 3a still makes sense or whether direct repayment suits you better.
• Mind the terms of fixed-rate mortgages: early repayment often comes with costs.
• Keep enough liquidity for maintenance and emergencies.
• Consider affordability in retirement and any pension funds already invested in your home.

These questions are closely linked to your retirement and wealth planning. Discuss them with your bank and an independent tax or financial adviser.

Frequently asked questions

The end of imputed rent is no reason to panic, but it is a good opportunity to look at maintenance planning, mortgage and taxes together.