Effects of the September 28, 2025 vote for homeowners and tenants
The September 28, 2025 vote abolished the imputed rental value and allows cantons to tax secondary residences. Low-debt owners benefit, while heavily indebted households pay more. The reform takes effect in 2028 after a two-year transition, and first-time buyers can deduct renovation expenses for ten years.
On September 28, 2025, Swiss citizens approved, by 57.7%, the reform of real estate taxation. The latter included two legally linked components:
- The introduction of a tax on secondary residences;
- The abolition of the imputed rental value for homeowners occupying their own dwellings.
Imputed rental value: What is it really about?
The imputed rental value corresponds to a fictitious income that the state treats as if the owner were receiving rent from their own home. In other words, if you live in a property you own, the tax authorities estimate the amount of rent you would pay if you rented it, and tax you as if you were earning that income, even though you actually receive no money.
Why this system? Because the State seeks to maintain a balance between homeowners, who do not pay rent and can deduct certain expenses related to their property (such as mortgage interest or maintenance), and tenants, who pay rent but cannot deduct any of that amount from their taxes.
Why this system? Because the State seeks to maintain a balance between homeowners, who do not pay rent and can deduct certain expenses related to their property (such as mortgage interest or maintenance), and tenants, who pay rent but cannot deduct any of that amount from their taxes.
What does the abolition of the imputed rental value concretely mean for homeowners?
Advantages for homeowners
- End of the imputed rental value: no more need to pay tax on a fictitious income.
- Two-year adjustment period: this allows time to prepare the transition, review your financial strategy, and still benefit from tax-deductible renovations.
- Support for first-time buyers: those who purchase their first home will be able to continue deducting mortgage interest during a transitional period of ten years.
- Mortgage interest, maintenance costs, and renovation work will no longer (or only partially) be tax-deductible.
- Highly indebted homeowners could therefore pay more taxes than before, since the deduction of their interest will disappear.
Why a tax on secondary residences?
At first glance, the abolition of the imputed rental value seems to be a gift for homeowners, with no real negative consequences. But in reality, that is not quite the case… The elimination of the imputed rental value will result in an estimated tax loss of about 1.8 billion francs per year for the Confederation and the cantons.
However, when a source of revenue is removed, a way must be found to compensate for these tax losses. That is why the reform provides the possibility for the cantons to introduce a tax on secondary residences. Each canton will be free to decide whether or not to apply this tax, and under what conditions.
However, when a source of revenue is removed, a way must be found to compensate for these tax losses. That is why the reform provides the possibility for the cantons to introduce a tax on secondary residences. Each canton will be free to decide whether or not to apply this tax, and under what conditions.
What will happen now after the abolition of the imputed rental value?
The abolition of the imputed rental value will not be immediate. A two-year transition period is planned to allow the authorities and taxpayers to adapt to the new tax system. Specifically:
- Until the reform effectively enters into force, the current system remains in place: homeowners will continue to declare the imputed rental value and may still deduct mortgage interest and maintenance costs.
- After this period, the imputed rental value will permanently disappear from the tax return.
- At the same time, tax deductions related to housing (interest, maintenance, renovation) will be abolished or greatly restricted, except for certain energy-related works.
Which owners benefit the most from the reform?
Homeowners with little or no debt: Often older households, they have already repaid their mortgage and own properties requiring little or no renovation (in the short term). They fully benefit from the abolition of the imputed rental value, while being little affected by the end of tax deductions. For retirees, it is even a relief: as rents increased, the imputed rental value also rose, which could increase the tax burden despite fixed incomes.
Buyers of recent or already renovated properties: Owners of new or recently renovated homes will have few or no renovation works in the short term. They will therefore benefit from the abolition of the imputed rental value without losing the possibility to deduct significant expenses.
Buyers of recent or already renovated properties: Owners of new or recently renovated homes will have few or no renovation works in the short term. They will therefore benefit from the abolition of the imputed rental value without losing the possibility to deduct significant expenses.
Which homeowners are disadvantaged by the reform?
Heavily indebted homeowners: Often young families or recent buyers, they will lose the possibility to deduct a large part of their mortgage interest. Their tax burden will increase, as they will continue repaying their debt without benefiting from the tax relief that previously accompanied it.
Owners of old or heavily renovation-needing properties: Those planning major renovation works (such as energy refurbishment or complete modernization) will also be disadvantaged. Maintenance and renovation expenses will no longer be deductible, which will increase the bill when investing in the restoration of the home.
Owners of secondary residences: They may be the most affected, because the cantons will be able to introduce a new specific tax on secondary residences to compensate for the loss of the imputed rental value. These homeowners could therefore see their taxes rise, especially in tourist regions where such properties are numerous.
Owners of old or heavily renovation-needing properties: Those planning major renovation works (such as energy refurbishment or complete modernization) will also be disadvantaged. Maintenance and renovation expenses will no longer be deductible, which will increase the bill when investing in the restoration of the home.
Owners of secondary residences: They may be the most affected, because the cantons will be able to introduce a new specific tax on secondary residences to compensate for the loss of the imputed rental value. These homeowners could therefore see their taxes rise, especially in tourist regions where such properties are numerous.
What provisions apply during the transition period?
Even though the imputed rental value will be abolished in the future, certain tax deductions will remain applicable during a two-year transitional period, until the reform is fully implemented. However, first-time homebuyers will continue to benefit from a limited deduction for maintenance costs and mortgage interest for ten years after purchasing their property.
Will the reform affect tenants?
Tenants will see practically no difference as a result of this reform. The imputed rental value applies only to dwellings occupied by their owners. It is also interesting to note that, although Switzerland has about 60% tenants, the vote was nevertheless approved, even though it mainly benefits homeowners. This can be explained by two possible reasons:
- Many tenants may have considered that the imputed rental value was an outdated tax method, introduced after the war, and no longer truly suited to the current reality of the housing market. They may feel that it is no longer justified to tax a fictitious income for those who live in their own home.
- Some tenants who wish to become homeowners one day are advantaged by the abolition of the imputed rental value. This favourable tax anticipation may have led some of them to vote for the abolition of the imputed rental value during the vote.
Advice for current and future homeowners:
- Plan renovations in advance: Carrying out renovation or energy-efficiency work before the reform comes into force (by 2028) still allows you to benefit from the current tax deductions.
- Favour already renovated properties or renovate quickly after purchase: Buying a new or already modernized home reduces the risk of non-deductible expenses. Otherwise, plan renovations quickly before the end of the transition period.
- Postpone investments in a secondary residence: The possible introduction of a specific cantonal tax makes this type of purchase currently more uncertain and potentially less profitable.
- Closely monitor market developments: The full effects of the reform (prices, cantonal taxation, demand) remain uncertain. It is advisable to monitor the evolution of mortgage rates, cantonal policies, and price trends before making major decisions.
Buy a property to renovate or a new property?
Buying a property to renovate remains advantageous for another two years, as long as tax deductions for renovation work are still possible. After the transition period, this option will become less attractive, even though the purchase prices of properties requiring renovation are generally lower.
Conversely, a new home is certainly more expensive to buy, but it will become more advantageous from a tax perspective once deductions are no longer allowed. Moreover, newer buildings are often better insulated and more energy-efficient, allowing for long-term savings.
Conversely, a new home is certainly more expensive to buy, but it will become more advantageous from a tax perspective once deductions are no longer allowed. Moreover, newer buildings are often better insulated and more energy-efficient, allowing for long-term savings.
In conclusion
The abolition of the imputed rental value marks a historic turning point in Swiss real estate taxation. Financially, the reform will result in an estimated revenue loss of around 1.8 billion francs per year, a significant share of which will affect the cantons, which will have to find compensatory solutions, notably through a tax on secondary residences.
Not all homeowners will be affected in the same way. The big winners will be those with little debt — owners who have already repaid their mortgage or have few renovations to carry out. First-time buyers will also benefit from temporary tax relief, thanks to the transitional deduction of mortgage interest. Conversely, heavily indebted owners or those with older properties requiring major renovations will have to adapt to a new, less favorable tax framework.
In short, this reform aims to modernize the tax system but reshuffles the deck:
Not all homeowners will be affected in the same way. The big winners will be those with little debt — owners who have already repaid their mortgage or have few renovations to carry out. First-time buyers will also benefit from temporary tax relief, thanks to the transitional deduction of mortgage interest. Conversely, heavily indebted owners or those with older properties requiring major renovations will have to adapt to a new, less favorable tax framework.
In short, this reform aims to modernize the tax system but reshuffles the deck:
- a clear advantage for those who have already consolidated their assets,
- an additional challenge for those just beginning their real estate journey.