If you live in your own home, you currently have to pay tax on a notional income in your tax return: the imputed rental value (Eigenmietwert). In return, you can deduct mortgage interest and maintenance costs. On 28 September 2025, voters approved a change of system that abolishes this principle for owner-occupied residential property. Until it comes into force, however, the existing system continues to apply. This article explains both sets of rules and shows what they mean for your planning.
The current system
The imputed rental value is the amount you would theoretically earn if you rented out your property. It is set by the tax authority and is usually well below the market rent. This value is added to your taxable income.
In return, you can deduct various costs:
- Mortgage interest: The debt interest you have paid is deductible.
- Maintenance costs: You can deduct either a flat-rate allowance or the actual costs. For direct federal tax, the flat rate is 10 % of the imputed rental value for buildings up to ten years old and 20 % for older buildings. Some cantons have their own rules. You can choose between the flat rate and the actual costs afresh in each tax period.
- Other deductions: Depending on the canton, for example for energy-saving measures or the preservation of historic monuments.
Whether the system works in your favour depends on the ratio between the imputed rental value and your deductions. With a large mortgage and high interest rates, the deductions often exceed the imputed rental value. With low interest rates and a small mortgage, there is usually additional taxable income left over.
The approved change of system
With the change of system, the imputed rental value on owner-occupied residential property will be abolished. At the same time, mortgage interest on owner-occupied property will no longer be deductible, and most deductions for maintenance costs will disappear. Separate rules apply to let properties and second homes.
The change of system will come into force in 2028 at the earliest (as at October 2026). The exact date will be set by the Federal Council. Until then, the existing system remains fully applicable, and you declare the imputed rental value, interest and maintenance as usual.
Worked example
A married couple lives in a detached house that is more than ten years old. The imputed rental value is CHF 24’000 per year. The mortgage amounts to CHF 600’000 at an interest rate of 1.32 % (as at October 2026). The flat-rate allowance of 20 % of the imputed rental value is used for maintenance. To calculate the tax effect, we assume a marginal tax rate of 30 %. This rate is an assumption; in reality it depends on the canton, the municipality and your income.
| Item | Current system | After the change of system |
|---|---|---|
| Imputed rental value | CHF 24’000 | abolished |
| Mortgage interest deduction | minus CHF 7’920 | abolished |
| Flat-rate maintenance deduction | minus CHF 4’800 | abolished |
| Additional taxable income | CHF 11’280 | CHF 0 |
Under the current system, the home increases taxable income by CHF 11’280. At a marginal tax rate of 30 %, this corresponds to taxes of CHF 3’384 per year. After the change of system, this amount would disappear in this example.
With different assumptions, the calculation can look quite different. With a larger mortgage, higher interest rates or major renovations with actual maintenance costs, the deductions can exceed the imputed rental value. In that case, the current system is more favourable, and the change leads to a higher tax burden.
What this means for amortisation
Under the current system, indirect amortisation is common. Instead of repaying the mortgage directly, you pay into pillar 3a (Säule 3a, the tax-privileged private pension) and pledge the balance to the bank. The mortgage therefore stays at the same level, the interest remains deductible, and you can also deduct the pillar 3a contributions from your income.
After the change of system, the advantage of deductible interest disappears. Direct amortisation therefore becomes relatively more attractive, because every franc you repay reduces interest costs that are no longer deductible. Based on the current position, contributions to pillar 3a will remain deductible, so a combination of both approaches may make sense.
Planning until the change comes into force
Until the change comes into force, a few considerations may be worthwhile. Larger maintenance and renovation work that you are planning anyway is still deductible under the current system. Postponing it until after the change may cost you the deduction. It is also worth reviewing your amortisation strategy and the terms of your mortgage with the change in mind.
Many detailed questions depend on how the cantons implement the change and on the exact date it comes into force. The information in this article does not replace tax advice. Clarify specific decisions with the cantonal tax office or a tax adviser.
If you would like to check how higher amortisation affects your financing and affordability, Voltavia Capital’s free affordability calculator can help. We would also be happy to assess your mortgage strategy in a personal consultation.