Imputed rental value is a notional rental income that owner-occupiers in Switzerland must declare as taxable income — even if they live in the property themselves. At present (May 2026), typical owners of detached houses pay CHF 1'500-4'500 in annual imputed rental value tax, depending on where they live and the tax rate. In March 2026, the Swiss Parliament decided to abolish it, with entry into force expected in 2028. Until then, the old rules remain in place. This guide explains the calculation, the tax impact and what the reform means for buyers.
Imputed rental value is the notional market rent that you, as the owner of an owner-occupied property, would theoretically receive. It is added to taxable income, offset by mortgage interest and maintenance costs as deductions. The idea behind it: tenants pay with taxed income — owners 'save' this rent and should be taxed in the same way. A Swiss peculiarity — most European countries never introduced imputed rental value.
The method varies by canton. In the canton of Zürich, around 3.5% of the tax value is used, in Bern 4.0%, in Zug 3.2%. Federal tax is calculated uniformly using a lump-sum method (typically 60-70% of the market rental value). Example: An owner-occupied flat with a tax value of CHF 800'000 in Zürich → imputed rental value ~CHF 28'000/year. At a 30% marginal tax rate: CHF 8'400 additional tax per year.
Three main deductions reduce the tax impact: mortgage interest (fully deductible), maintenance costs (either a flat rate of 20% of the imputed rental value or actual costs — whichever is more advantageous), and ancillary property costs in some cantons. With an 80% loan-to-value ratio at an interest rate of 1.65%, this already means CHF 10'500 in interest — more than offsetting the imputed rental value. From a tax perspective, home ownership can therefore even have a negative burden (tax saving).
With high leverage (80%+) and high interest rates, the tax impact is neutral or even positive. With low leverage (below 50%) and low interest rates, however, imputed rental value applies in full: you pay tax on a notional rent without adequate deductions. As a result, many owners deliberately keep a moderate mortgage (66.7% loan-to-value, 1st mortgage) in order to preserve tax optimisation.
The reform was approved by Parliament on 15 March 2026, with entry into force expected in 2028. Key points: abolition of imputed rental value for owner-occupied primary residences. In return, mortgage interest will no longer be deductible — as compensation for the lost tax revenue. Second homes will retain imputed rental value. On balance: low loan-to-value ratios benefit strongly, while high loan-to-value ratios tend to lose out.
During the transitional period until 2028, an optimised mortgage strategy pays off. Some banks already offer 'reform options': mortgages that can be flexibly adapted to the new rules after entry into force (repayment or retention option). Important: take the reform into account in long-term financial planning — an 80% loan-to-value ratio will be less worthwhile after 2028 than it is today.