Saving Taxes With Homeownership: What Swiss Property Owners Should Know

Owning property in Switzerland is not just a personal decision – it’s also a significant financial factor, especially from a tax perspective. Those who use their property strategically can benefit from substantial tax savings year after year. However, this requires a solid understanding of the relevant rules and careful planning.

Published on: May 12, 2025 | Reading time: approx. 5-10 minutes

Property Use: Owner-Occupied or Rented?

The way your property is taxed depends largely on whether you live in it yourself or rent it out:

• Rental property: Rental income must be declared as taxable income.
• Owner-occupied property: The so-called imputed rental value is taxed – a fictitious amount that usually equals 60–70% of the market rent. We’ve already covered this topic in a previous blog post. It’s worth noting that the imputed rental value is currently under political discussion and may be abolished in the future.

Additionally, depending on the canton, real estate taxes and wealth taxes on the property’s value may apply.

Which Expenses Are Tax-Deductible?

Homeowners can deduct various expenses from their taxable income, provided certain conditions are met. Key deductible costs include:

• Mortgage interest: Fully deductible, offering potential tax relief. It’s important that the loan is aligned with your personal financing strategy.
• Maintenance and repairs: Expenses that preserve the property’s value like replacing windows or painting are deductible. In contrast, value-adding upgrades (e.g., installing a sauna) are not.
• Flat-rate deduction: In years with low maintenance expenses, the tax authorities allow a lump-sum deduction (typically 10–20%, depending on the age of the property and the canton).
• Indirect amortization via Pillar 3a: Instead of repaying the mortgage directly, contributions to tied pension savings (3rd pillar) can be deducted from taxable income while still reducing debt over time.

Energy-efficiency improvements such as switching to a heat pump may also be tax-deductible. Specific rules vary by canton.

Learn more about renovation deductions in this UBS guide.

Planning Ahead: Taxes on Sales, Gifts, and Inheritance

When selling a property, capital gains tax applies to the difference between the purchase and sale price. However, this can be reduced through proof of qualifying maintenance investments or a long holding period. In some cases, buying a replacement property for personal use within a set timeframe allows you to defer the tax payment.

Inheritance and gifts involving real estate may also trigger tax obligations, depending on the canton and the degree of kinship. The more distant the relationship, the higher the tax rate. For precise tax advice, we recommend consulting a tax professional. We’re happy to refer you to experienced specialists in your region.

Financing and Tax Strategy: A Combined Approach

Thoughtful mortgage planning can significantly enhance your tax position. It’s not only about interest rates, but about the overall structure: loan terms, amortization methods, and flexibility should align with both your financial and tax-related goals.

Especially when planning renovations or larger investments, coordinating with your lender can help ensure both affordability and tax efficiency.

Strategic Financing With Perspective: HYPOHAUS Is Here to Support You

Whether you’re buying a home, planning renovations, or looking for long-term financing, choosing the right mortgage makes all the difference. As independent mortgage experts, we help you find financing solutions that match your life plans and financial goals.

We compare offers from banks, insurance companies, and pension funds focusing not only on interest rates, but also on long-term affordability and flexibility.

Learn more about HYPOHAUS services here.