Imputed Rental Value Abolished: What the Yes Vote Means for Homeowners, Tenants, and the Real Estate Market

Published on: September 29, 2025 | Reading time: 15 minutes

On September 28, 2025, the Swiss electorate approved the abolition of the imputed rental value with 57.7 percent of the votes in favor. This marks the end of a decades-long dispute over one of the country’s most controversial tax rules. This article puts the result into context, explains the tax implications for different groups, highlights opportunities and risks, analyzes the effects on the real estate market, and shows why individual advice is now particularly important.

Introduction: A historic decision after decades of debate

For decades, taxing a fictitious rental income on owner-occupied property has been a source of controversy. Criticism focused especially on the burden for households with lower retirement incomes. Several reform attempts failed at the ballot box. With the current decision by both the people and the cantons, one of the oldest tax policy instruments is being fundamentally restructured.

The referendum result in detail

The proposal received 57.7 percent Yes votes and 16.5 cantonal votes. In total, 19 cantons voted Yes and 7 voted No. Resistance was high in French-speaking Switzerland, while German-speaking regions, Ticino, and Romansh-speaking areas voted largely in favor. Basel-Stadt and Valais rejected the proposal. Politically, the camp of the Homeowners’ Association and center-right parties prevailed, while the Social Democrats, Greens, tenants’ association, and various construction and environmental groups opposed it.

Tax implications for homeowners, tenants, and investors

With the abolition, the obligation to declare fictitious rental income on owner-occupied homes ends. At the same time, most deductions for mortgage interest and maintenance costs are eliminated. For new homeowners, a transitional rule is planned: up to ten years after purchase, mortgage interest can be deducted to a limited extent, with the maximum allowable deduction decreasing linearly each year. For investment properties, the restrictive proportional method will apply; mortgage interest can only be deducted in proportion to immovable assets, which tends to increase the tax burden. Taxpayers without real estate can no longer deduct private interest. Implementation is expected no earlier than 2028, as cantonal systems must first be adapted.

Opportunities and risks for private property owners

Households with largely amortized mortgages will likely benefit from lower taxes. Pensioners in particular will be relieved, and tax returns will become simpler. At the same time, highly leveraged homeowners lose the broad mortgage interest deduction. Planned renovations and energy-related investments should be recalculated, and value-enhancing expenses carefully documented so they can later be considered for property gains tax purposes. It remains open whether and in what form cantons will introduce a special property tax on secondary residences. This decision will significantly influence the future burden on vacation homes. A perspective from ZKB can be found here: ZKB Blog – Imputed Rental Value Abolished.

Political and economic fronts

Supporters criticized the imputed rental value as an unfair over-taxation and as an incentive to keep mortgages permanently high. Opponents warned of revenue losses for the cantons, possible additional burdens for tenants, and setbacks for energy-efficient renovations. Mountain cantons, heavily affected by secondary residences, reacted particularly sensitively and will now have to work out cantonal solutions for a new tax.

Market impacts on real estate prices and demand

The effects will vary by segment. For primary residences, the relief could support demand, although interest rates and equity requirements remain key obstacles. For secondary residences, the impact will depend on the design of potential cantonal property taxes. A broad decline in prices is unlikely given the supply shortage caused by the Second Homes Act. The price gap between new builds and older properties is likely to widen, as many existing buildings require substantial renovations and broad maintenance deductions will disappear. Prioritizing investments carefully and clarifying long-term property strategies will be essential.

Conclusion and significance for tax policy and homeownership

The decision marks a systemic shift with far-reaching consequences. Many homeowners will see tax relief. At the same time, new questions arise regarding optimal financing, renovation planning, and the treatment of secondary residences. Switzerland is shifting focus from deductions to leaner income taxation with greater cantonal leeway.

Why a conversation with a mortgage expert at HYPOHAUS is now crucial

The reform changes the fundamentals of financial and tax planning. Amortization strategies, mortgage size, liquidity planning in retirement, and timing of renovations all need to be reassessed. Our team at HYPOHAUS analyzes your personal situation, estimates tax implications, and develops a long-term financing strategy that fits. More information about our services can be found here: HYPOHAUS Services