Swiss Homeownership Tax Reform: Preparing for the End of Imputed Rental Value

Executive Overview

Following the popular vote of 28 September 2025, Switzerland is moving toward a new system of homeownership taxation. The reform abolishes the taxation of imputed rental value on owner-occupied homes and, in exchange, restricts deductions available under the current regime, notably for mortgage interest and maintenance. The change alters the economics of holding property with debt in Switzerland.

The effect is not uniform. Owners with low debt and modest maintenance expenditure are positioned differently from highly leveraged owners or those planning significant renovation work, and the outcome is sensitive to the level of mortgage interest rates.

Regulatory Background

The Federal Department of Finance has indicated that the impact depends heavily on factors such as mortgage interest rates and the individual owner's financing position. The reform also enables cantons to introduce a special property tax on second homes that are predominantly used by the owner, which adds a cantonal dimension to what is otherwise a federal change of system.

Implementation provisions are still being adapted, and entry into force depends on the completion of that work. The direction of the reform is established by the vote; the detailed rules that will determine individual outcomes are not yet final in every respect.

Why It Matters

The reform affects decisions with long time horizons — financing, renovation and second-home ownership — which is why it is worth considering before the rules take effect rather than afterwards.

• Owner-occupiers with significant mortgage debt, for whom the restriction of interest deductions changes the cost of leverage.
• Owners planning renovation or maintenance work, where the timing of expenditure interacts with the change of regime.
• Owners of second homes predominantly used by themselves, given the possibility of a cantonal special property tax.
• International clients acquiring Swiss residential property, whose financing structure should be assessed under both regimes.
• Families planning intergenerational transfers of property, where holding costs influence the structure chosen.

Practical Issues to Review

1. 01Model the position under the current and the future regime, including sensitivity to mortgage interest rate scenarios.
2. 02Review amortisation strategy, since the treatment of debt is central to the change.
3. 03Assess the timing and sequencing of planned renovation and maintenance expenditure.
4. 04Consider the position of second homes and the cantonal measures that may apply to them.
5. 05Coordinate the analysis with pension and indirect-amortisation arrangements where these support the financing.
6. 06For cross-border owners, review the interaction with taxation in the state of residence before restructuring debt.

TCC View

TCC's view is that property decisions should be modelled under both the current and the prospective regime, particularly for internationally mobile clients considering acquisition, relocation or debt restructuring. A financing structure that is efficient today may not be so once interest deductibility is restricted.

At the same time, we would caution against restructuring in anticipation of rules whose implementing provisions are not yet complete. The reasonable objective at this stage is to know what one would do under each scenario, and to avoid commitments that would be difficult to unwind.

Planning Note

Entry into force still depends on the completion of implementation work at federal and cantonal level, so premature assumptions about the final tax outcome should be avoided. Owners and prospective purchasers should prepare the analysis now, monitor the implementing provisions and the cantonal responses on second homes, and act once the applicable rules and dates are confirmed.