A turning point for homeowners/ On September 28, the next referendum in Switzerland
On September 28, Swiss citizens will vote on a constitutional amendment that would allow cantons to impose a separate property tax on second homes occupied primarily by owners. However, this vote is not just about second homes; it is also key to abolishing imputed rental value, an early and often controversial feature of the Swiss tax system.
The Swiss parliament has legally linked the two reforms: the imputed rent can only be abolished if a constitutional amendment is passed. The result of this vote will have far-reaching consequences for homeowners.
The imputed rental value refers to a notional income attributed to homeowners who live in their property. The reasoning 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 usually amounts to 60-70% of the market rent for a comparable property, although 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, and energy-saving investments. These deductions not only help reduce tax liabilities, but also serve as incentives for property maintenance.
If the constitutional amendment is approved, the imputed rent value will be abolished for both primary and secondary residences at the federal, cantonal and municipal levels. Homeowners will no longer have to declare fictitious income for tax purposes.
To partially offset the expected decline in tax revenues, the amendment would give cantons the power to introduce a special property tax on second homes primarily occupied by owners. This tax is optional and each canton can decide whether and how to implement it.
The reform is expected to simplify the tax system and bring benefits to homeowners, especially retirees. However, it could also increase the tax burden on households with high debt, such as young families, who will lose access to interest deductions.
If the amendment is approved, the Federal Council will determine the date of entry into force. In practice, the federal government is expected to give the cantons a transition period of approximately 2 years to adapt their legislation. As a result, the new rules could come into effect on 1 January 2028.
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