On 1 January 2029, Switzerland will introduce a major reform of the way it taxes home ownership. If you own a home in Switzerland, now is a good time to review your mortgage, maintenance plans and approach to managing your property.

What is changing in 2029?

Switzerland will abolish imputed rental value for primary and secondary residences used by their owners. As a result, homeowners will no longer have to declare the notional income from living in their own home.

At the same time, the reform will reduce or remove several tax deductions that homeowners can currently claim.

Which tax deductions will change?

Homeowners will no longer be able to deduct maintenance expenses for owner-occupied properties at federal, cantonal or municipal level. However, the deduction will still apply to properties that are let.

The reform will also restrict deductions for interest on debt. The calculation will take into account the value of a taxpayer’s rental properties as a share of their total assets.

However, a transitional measure will allow first-time buyers of a primary residence in Switzerland to deduct part of their mortgage interest for a limited period.

In addition, investments in energy efficiency and environmental protection will no longer be deductible for direct federal tax purposes. Cantons may keep these deductions for a limited period. They may also introduce a special tax on second homes used mainly by their owners.

Will every homeowner pay less tax?

Not necessarily. The impact will depend on how much you owe, how much interest you pay and what you spend on maintenance.

According to the Swiss Federal Tax Administration, when mortgage rates are low, the reform tends to benefit owners who have already paid off a substantial part of their mortgage. By contrast, when rates are high, tighter limits on deductions could lead to a higher tax bill.

How can homeowners prepare?

First, assess the condition of your property and identify any work it needs. Then discuss your plans with your tax adviser, especially if you are considering bringing forward maintenance work or changing your financing arrangements.

Before making a decision, weigh the costs and benefits against what the property actually needs. If you own a unit in a condominium (known as PPP in French-speaking Switzerland), consider these factors when planning work on shared parts of the building.

How GPM can help

GPM Global Property Management SA, part of the Fidinam Group, helps property owners manage and maintain their buildings and protect their long-term value. We can help you plan maintenance and make informed decisions about your property as tax rules change.

For further information: gpm@fidinam.ch

This article is for information only. The impact on individual homeowners depends on their circumstances and the applicable rules.