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In Switzerland, the imputed rental value is a recurring topic of debate. This tax mechanism, unique to our country, directly affects owners who live in their own homes. But today, there is a trend toward its abolition. Why does this reform generate so much interest — even concern? Let’s take a closer look.

What is the imputed rental value?

The imputed rental value is a fictional income that the state assigns to owners who live in their own property. In other words, you are taxed as if you were receiving rent from your own house or apartment, even if you do not actually earn any income from it.

The original purpose of this measure was to establish tax fairness between owner-occupiers and tenants. To compensate, owners can currently deduct certain expenses (mortgage interest, maintenance costs, energy renovations, etc.).

Why do people want to abolish the imputed rental value?

The debate has gained momentum in recent years. Several arguments support its abolition:

  1. A tax perceived as unfair
    Many owners, especially retirees who have paid off their mortgage, no longer have deductible expenses. However, they continue to be taxed on a fictional income. This penalizes those who have saved their whole lives to become homeowners.
  2. A complex and outdated system
    The imputed rental value is often criticized for its complexity. Its calculation varies from canton to canton and lacks transparency. Many see it as a tax relic from another era.
  3. Inconsistent incentives
    Currently, the system encourages debt: the higher your mortgage, the more interest you can deduct. Conversely, those who repay their debt are disadvantaged tax-wise. This goes against sound financial management.

Who opposes the abolition?

Despite these arguments, some players in the real estate market and economic circles worry about this reform. Among the concerns expressed:

  • A reduction in deductible expenses:
    If the imputed rental value is abolished, mortgage interest tax deductions could also disappear or be limited. This would mainly impact young heavily indebted households.
  • Consequences for the real estate market: Fewer tax benefits could slow down home ownership. It could also destabilize certain financial balances for existing owners.

What does Parliament propose?

The Swiss Parliament is working on a reform that foresees:

  • The abolition of the imputed rental value for owner-occupied housing.
  • The end of deductions for mortgage interest (except for the acquisition of the first home during a transitional period)
  • The retention of certain deductions (energy renovations, heritage preservation).

Why is this important?

The abolition of the imputed rental value is much more than a technical adjustment. It raises fundamental questions about tax justice, the promotion of private ownership, and long-term incentives. It also touches on demographic issues: in Switzerland, many retirees are homeowners but have modest incomes. For them, the reform could ease the tax burden.

However, care must be taken to ensure that future homeowners are not penalized, especially in a context of volatile mortgage rates and high property prices.

In summary

Advantages of abolition
  • End of a double penalty for retirees
  • Encouragement to reduce household debt
  • Administrative simplification
Risks and concerns
  • Reduction of tax deductions
  • Lower attractiveness of property purchase
  • Risk of slowing down home ownership


Conclusion

The abolition of the imputed rental value represents a major development in housing taxation in Switzerland. If carried out in a balanced way, it could correct some injustices in the current system while clarifying the framework for future owners. But like any tax reform, it will require fine adjustments to avoid disadvantaging part of the population. A matter to watch closely.

Sources
raiffeisen.ch - Article
24heures.ch - Article
neho.com - Article
swisslife.ch - Article