Rental value – the end of a system, and what comes next?

Sunday 28 September 2025 marked the end of rental value. The verdict of the people was clear, turning an important page in the Swiss tax system. 

A system that was obscure to many and unfair to others, the abolition of rental value will have very different implications for property owners who occupy their own home. Here is a brief overview of the winners and losers:

Winners or losers?

The rental value is (was) a notional income added to the property owner's taxable income, intended to offset the financial advantage of living in one’s own home rather than paying rent. As a result, the abolition of this notional income initially leads to a reduction in gross property income for all property owners who do not rent out their property. 

At first glance, it may seem that all property owners benefit. But the story doesn’t end there. Rental value gave rise to several deductions, and this is where the real debate begins. There were two main deductions that could be claimed: the deduction of interest expenses (mortgage) and maintenance costs. 

The winners are therefore logically those who will see the rental value disappear from their tax returns and who did not really have any deductions to offset it. In other words, landowners who have little or no mortgage debt and therefore little interest to pay, and those who have no actual maintenance work to claim. It should be noted that, with regard to secondary homes, the cantons will have the option of introducing a new property tax. However, many cantons have already stated their intention to waive this tax.

On the other hand, the losers will be owners who, although they will also no longer have rental value, will no longer be able to deduct the interest expenses they pay, or the maintenance work they must carry out on their property in order to maintain its value. 
The line between winners and losers is thin and, above all, it varies over time, particularly with regard to maintenance costs. A property owner who currently has no costs will inevitably incur them sooner or later, unless they abandon the property until it is sold and the problem of renovation becomes someone else's.

What happens next?

Although the people have voted to abolish rental value, the change won’t take effect immediately.  As it stands, the change is expected to come into force in 2028 at the earliest, to give the cantons time to adjust their cantonal laws.

In the meantime, the current system remains in place. For those who stand to gain from this reform, it will therefore be a case of waiting a little longer before seeing their tax bills reduced. 

For those who stand to lose out (in the future), it may still be possible to take action: 

• When it comes to mortgage debt, many homeowners are taking advantage of low interest rates and tax benefits and have therefore not prioritised debt repayment in order to invest elsewhere and maximise their returns. Without the tax benefit, the overall return may become less attractive and debt repayment may become more appealing than in the past. A case-by-case calculation is necessary.
• For maintenance costs, it is necessary to determine what type of costs are expected and whether they can be anticipated. There is no doubt that demand for renovations will increase in the coming months so that the costs can still be claimed as deductions in the remaining two years. It should be noted, however, that costs related to energy savings and environmental protection will remain deductible at the cantonal (and municipal) level. In this context, cantonal adjustments could also play an important role. Case-by-case planning is therefore also required. 

The abolition of the rental value represents a significant reform of the Swiss tax system that will affect all property owners, with implications that will vary greatly depending on individual circumstances. Anticipating this change may be a good idea in order to minimise its impact and take advantage of the deductions while they are still available.