A legacy under scrutiny
The imputed rental value (known as Eigenmietwert in German, valeur locative in French) refers to a notional income attributed to homeowners who live in their own property. The rationale is that those who own their home benefit economically by avoiding rent, and this advantage should be taxed like any other form of income. In practice, the imputed rental value typically amounts to 60–70% of the market rent for a comparable property, tough the calculation methods vary across cantons.
In return, homeowners are currently allowed to deduct a wide range of costs from their taxable income: mortgage interest, maintenance expenses, as well as energy-saving investments. These deductions not only help reduce tax liabilities but also serve as incentives for property upkeep.
What the reform would change
If the constitutional amendment is approved, the imputed rental value would be abolished for both primary and secondary residences at federal, cantonal, and communal levels. Homeowners would no longer have to declare a fictitious income for tax purposes.
To partially offset the expected decline in tax revenue, the amendment would empower cantons to introduce a special property tax on predominantly owner-occupied second homes. This tax is optional, and each canton may decide whether and how to implement it.
In parallel, the reform would eliminate most existing deductions at the federal level. This includes, in particular, deductions for maintenance and energy-efficiency investments. Mortgage interest would also no longer be generally deductible, except in two key cases:
- Rental properties held as private assets: Interest deductions would be allowed proportionally for the rented portion.
- First-time buyers of owner-occupied homes: a transitional deduction of CHF 10,000 per year for married couples (CHF 5,000 for singles) in the first year after purchase, decreasing by 10% annually over ten years.
While the federal government would eliminate these deductions, cantons and municipalities may continue to allow certain deductions, especially for energy and environmental investments, but only until 2050 at the latest. Additionally, first-time buyers of owner-occupied homes may benefit from the transitional deduction not only at the federal level, but also at the cantonal level.
The reform is expected to simplify the tax system and benefit debt-free homeowners, particularly retirees. However, it may also increase the tax burden on heavily indebted households, such as young families, who will lose access to generous interest deductions.
In case of rejection
If voters reject the constitutional amendment, the current system remains in place, with imputed rental value taxed and existing deductions allowed. The abolition of the imputed rental value will not take effect, as it is legally dependent on the amendment. Cantons will not be authorized to introduce the special property tax on predominantly owner-occupied second homes.
Timeline
The vote is scheduled for Sunday, 28 September 2025. If the amendment is approved, the Federal Council will determine the date of entry into force. In practice, the federal government is expected to grant cantons a transition period of approximately 2 years to adapt their legislation. As a result, the new rules are likely to be implemented on 1 January 2028.
