Abolition of the imputed rental value: What will change from 2029
On 1 January 2029, the imputed rental value will be abolished, and with it the deductions for mortgage interest and maintenance. Comparis answers the key questions: who gains, who loses, and what you should do by the end of 2028.
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1. No imputed rental value, no deductions: What will change from 2029
Anyone who currently lives in their own house or apartment pays tax on the imputed rental value as income. In return, mortgage interest and maintenance costs are deductible. From the tax year 2029 the imputed rental value will be abolished and the deductions will cease to apply. This applies to the direct federal tax and for all cantonal and municipal taxes.
| Position | Until the end of 2028 | From 2029 |
|---|---|---|
| Imputed rental value | taxable income | no longer applicable |
| Mortgage interest | tax-deductible | only for first-time buyers and rented properties |
| Maintenance and renovations | tax-deductible | no longer apply |
| Energy-efficiency renovations | tax-deductible | no longer applies at the federal level; cantons may retain the deduction until 2050 |
| Heritage conservation | tax-deductible | remains tax-deductible |
| Wealth tax on property | Yes | remains |
The Wealth tax remains. So does the property gains tax on sale and, in some cantons, the property tax. For rented apartments little changes. Rental income remains taxable, and maintenance costs and part of the interest payments remain tax-deductible.
Good to know: The tax years 2026 to 2028 will still operate under the old system. You will complete the first tax return without an imputed rental value in 2030 for the tax year 2029.
2. Who benefits from the abolition of the imputed rental value and who does not?
The consequences of abolishing the imputed rental value depend on two figures: the amount of your mortgage and the interest rate. As a rule of thumb: The smaller the mortgage and the lower the interest rate, the greater the gain. If you have largely paid off your mortgage, you now pay tax on the imputed rental value of your property, against which there are almost no deductions. These people benefit the most. If interest rates rise, those who are heavily in debt lose the deduction that has previously provided them with relief.
Example: Detached house with an imputed rental value of 20’000 francs
| Situation | Previously taxable (imputed rental value minus interest minus maintenance allowance) | Tax consequences from 2029 |
|---|---|---|
| Mortgage 300’000 francs, interest rate 2% | 20’000 minus 6’000 minus 4’000 = 10’000 francs | 3’000 francs less in tax per year |
| Mortgage 700’000 francs, interest rate 2% | 20’000 minus 14’000 minus 4’000 = 2’000 francs | 600 francs less tax per year |
| Mortgage 700,000 francs, interest rate 4% | 20,000 minus 28,000 minus 4,000 = minus 12,000 francs | 3,600 francs more tax per year |
Assumptions: Maintenance lump sum of 20% of the imputed rental value, marginal tax rate of 30%.
At today’s interest rate level, most people come out ahead. If interest rates rise to 4%, a heavily indebted household will now be worse off. Owners of older houses with extensive renovation needs older houses in need of extensive renovation. They lose the maintenance deduction. At an interest rate level of 1.5% the federal government estimates estimates the shortfall in revenue at around 1.8 billion francs per year. This figure applies to the federal government, the cantons and the municipalities together. From around 3% interest the state will collect more than it does today.
Comparis tip: Calculate your own case using the figures from your last tax return as follows: imputed rental value minus mortgage interest minus maintenance. If the result is positive, you will save tax from 2029 onwards. If it is negative, you’ll pay more.
3. Deduction of debt interest from 2029: only for first-time buyers and landlords
From 2029, you will only be able to deduct mortgage interest in two cases still deduct.
First-time buyer deduction: 10,000 francs, decreasing each year
Anyone who is buying an owner-occupied home for the first time in Switzerland for the first time receives a temporary deduction for mortgage interest. In the first tax year after the purchase, married couples and registered partnerships may deduct a maximum of 10,000 francs deduct, all others 5,000 francs. The deduction decreases by one tenth each year and ends after ten years ends.
| Year after purchase | Married couples | Other |
|---|---|---|
| 1 | 10,000 francs | 5,000 francs |
| 2 | 9,000 francs | 4,500 francs |
| 5 | 6,000 francs | 3,000 francs |
| 10 | 1,000 francs | 500 francs |
The first-time buyer deduction applies also for purchases before 2029. For example, a married couple bought their first home in 2025. In 2029, they can still deduct 7,000 francs in 2029, and 6,000 francs in 2030. In 2035, it will be 1,000 francs, and from 2036 onwards, the deduction will no longer apply.
Rented properties: Deduction based on share of assets
In addition to your home, do you own a rented apartment, the interest payments remain partially deductible. The decisive factor is the proportion of rented properties in your total assets. The owner-occupied house counts as part of the assets, but not as part of the rented portion. It therefore reduces the proportion.
Example: Owner-occupied home, holiday home, rented apartment and savings account
| Position | Amount |
|---|---|
| Home ownership | 800’000 francs |
| Holiday apartment, owner-occupied | 300’000 francs |
| Rented apartment | 800’000 francs |
| Savings account | 200’000 francs |
| Total assets | CHF 2’100’000 |
| % rented | 38.1% |
| Total loan interest | 10’000 francs |
| Deductible | 3’810 francs |
Proportion let: 800,000 divided by 2,100,000. Deductible: 38.1% of 10,000 francs. Sample calculation according to fact sheet of the Federal Department of Finance.
4. Renovations: deductible until the end of 2028, after which only energy-related and historic preservation work will be deductible
Today, you can maintenance work on your home from your taxable income. This includes a new kitchen, bathroom, façade or roof. From 2029, that will no longer be the case. Two exceptions remain:
Energy-efficiency renovations such as a heat pump, solar system or insulation: the deduction will cease to apply at the federal level. The cantons may retain it until no later than 2050 beibehalten. Whether your canton does so is up to it to decide.
Heritage conservation: Work on listed buildings will remain tax-deductible at the federal level.
Anyone who renovate would like to renovate by the end of 2028 should do so.
Example: kitchen renovation for 40’000 francs
| Timing | Calculation | Tax saving |
|---|---|---|
| Tax assessment 2028 | 40’000 francs multiplied by the 30% marginal tax rate | 12’000 francs |
| Tax assessment 2029 | No more deduction | 0 francs |
It is better to spread larger projects over 2027 and 2028. This way, you break the tax progression in both years. Tax progression.
Good to know: Whether the invoice date or payment date counts is regulated differently in each canton. Clarify this with your tax office before carrying out a renovation at the end of 2028. Value-enhancing investments, such as an extension, have never been deductible. However, they still reduce the property gains tax when selling.
5. Should I pay off my mortgage before 2029?
Before 2029, additional amortisation brings no tax benefit. On the contrary: until the end of 2028, you will continue to pay tax on the imputed rental value, but you will lose the deduction of interest on the amount repaid. Only from 2029 will repayment be more worthwhile than it is today, because interest will then no longer provide a tax benefit.
Example: repaying 100,000 francs at an interest rate of 2%
| Timing | Calculation | Saving per year |
|---|---|---|
| Before 2029 | 2,000 francs in interest saved, 2,000 francs more in taxable income at 30% | 1,400 francs |
| From 2029 | 2,000 francs in interest saved, no tax consequences | 2,000 francs |
Whether or not you should repay your mortgage therefore depends less on the date than on three questions:
Do you need the money? What is tied up in the house is no longer available. It is possible to increase the mortgage at a later date, but not guaranteed.
Could the money earn more elsewhere? If the return on your investments is higher than the mortgage rate, repayment is not worthwhile.
Do you have a fixed-rate mortgage? Anyone who repays it early will pay an early repayment charge. You should therefore repay when a tranche matures.
Comparis tip: Do you want to start making repayments from 2029, and does one of your tranches expire in 2027 or 2028? Then renew it only for a short term or as a Saron mortgage. This way, you will pay no penalty or only a low one in 2029. With indirect amortisation via pillar 3a, one advantage will disappear from 2029 onwards: mortgage interest will no longer be tax-deductible. The 3a contributions remain tax-deductible.
6. Holiday homes and second homes: No more imputed rental value, property tax possible
The imputed rental value on the holiday apartment also no longer applies. In return, the cantons are now allowed to levy a property tax on second homes This is often also referred to as a second-home tax in this context. The mountain cantons lose a lot of money with the abolition of the imputed rental value because there are many holiday homes there. The property tax is intended to compensate for this shortfall.
Graubünden presented concrete plans at the end of August 2026 concrete plans presented. The tax is intended to apply from 2029 and to be based on the wealth tax value of the property. The canton proposes 1.5 per thousand for itself. Communes and churches may also levy their own property tax and set the rate themselves. The Grisons tax administration has calculated the rate that would compensate for the communes’ losses. In Davos, it would be 1.6 per thousand, in Arosa and St. Moritz 1.3 per thousand, and in Silvaplana 1.0 per thousand. Anyone who rents out their apartment for at least half a year, should not have to pay property tax. The consultation period runs until 27 November 2026. The voters of Grisons have the final say.
Example: Holiday home in Davos with a wealth tax value of 800’000 francs
| Position | Calculation | Amount per year |
|---|---|---|
| Cantonal property tax | 1.5 per thousand of 800,000 francs | 1,200 francs |
| Municipal property tax | 1.6 per thousand of 800,000 francs | 1,280 francs |
| Total | 1,200 plus 1,280 francs | 2,480 francs |
Assumption: Davos introduces the tax at the calculated rate.
Valais and Ticino are considering a similar tax. Bern and St. Gallen leave the decision to the municipalities. Nine cantons have said no, including Zurich, Zug and Aargau. There, the imputed rental value for the second home is abolished without replacement.
Good to know: If you let your holiday home permanently, hardly anything changes: the rental income remains taxable, and maintenance costs and the proportionate debt interest remain deductible. If you use the apartment partly yourself, the question remains open. According to the federal government, the law does not clearly regulate this case.
7. Imputed rental value referendum: how abolition came about
The Confederation introduced the imputed rental value 1934 with the Federal Crisis Levy. Three attempts to abolish it failed at the ballot box: in 1999, 2004 and 2012.
On the fourth attempt, Parliament linked the abolition to a constitutional amendment. It gives the cantons the right to levy a property tax on second homes. Parliament passed the package in December 2024. The governments of the mountain cantons nevertheless recommended a «no» vote.
In the vote on the imputed rental value on 28 September 2025 the electorate voted in favour with 57.7% Yes, and the majority of cantons was also achieved. On 1 April 2026 the Federal Council set the date of entry into force as 1 January 2029 The cantons had requested this date because they need to amend their tax laws.
8. FAQs on the abolition of the imputed rental value
On 1 January 2029. The 2029 tax year is the first without an imputed rental value; you will complete the tax return for it in 2030 in 2030.
The Imputed rental value is a fictional income. It represents the rent that you could earn from your house or apartment. In most cantons, it amounts to around 60% to 70% of the market rent.
It disappears from the tax return, at the federal, cantonal and communal levels. At the same time, deductions for mortgage interest and maintenance no longer apply. The wealth tax on the property remains.
From a tax perspective, no. Until the end of 2028, you will continue to pay tax on the imputed rental value and will lose part of the interest deduction with each repayment. From 2029 onwards, paying off the mortgage will be more worthwhile. However, wait until the end of a tranche to make the repayment, end of a tranche, otherwise you will have to pay an early repayment charge.
Value-preserving work on your home will no longer be possible. Energy-efficient renovations remain deductible in those cantons that retain the deduction, until 2050 at the latest. Conservation work on listed buildings remain tax-deductible at the federal level.
The imputed rental value will also be abolished in this case. Depending on the canton, a property tax will be added. Graubünden plans to levy 1.5 per thousand of the wealth tax value for the canton; municipalities may levy their own tax. Valais and Ticino are considering it, while nine cantons are not going to introduce it.
For owner-occupied homes no longer. Two exceptions remain: the first-time buyer deduction for ten years and the proportional deduction for rented properties.
Buying a property: all the steps at a glance
This guide is part of step one «Is it worth it for you to buy a home?». In the overview, Comparis shows all the steps, from the question of whether it is worth buying to moving in.
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This article was first published on 08.10.2026
