The Swiss Federal Council has decided that the housing tax reform will enter into force on January 1, 2029, marking the abolition of the imputed rental value tax for owner-occupied properties.
In September, voters and cantons approved a federal decree related to the taxation of second homes. The decree grants cantons the right to introduce a special tax on second residences primarily used for personal purposes. This tax aims to offset potential revenue losses resulting from the abolition of the imputed rental value tax.
A three-year transition period before the reform takes effect will give cantons sufficient time to adapt their legislation, while simultaneously introducing the new tax on second homes and phasing out the existing system.
A Swiss-specific feature
The imputed rental value tax is a distinctive element of the Swiss tax system and applies to homeowners living in their own properties. It represents a notional income corresponding to the amount owners would earn if they rented out their property.
Under the new reform, this form of taxation will be abolished for both primary and secondary residences. In return, mortgage interest, as well as maintenance and renovation costs, will only be partially deductible. These measures will also take effect on January 1, 2029.
Revenue losses are estimated at around 1.8 billion Swiss francs annually, with two-thirds expected to be borne by the cantons. For this reason, Parliament has approved the introduction of a special tax on second homes, which cantons—particularly those with strong tourism sectors—will be free to apply or not.
