The Swiss Federal Council voted on 1 April 2026 to delay the abolition of the imputed rental value tax until 1 January 2029, bowing to pressure from cantonal finance directors who argued they needed more time to prepare replacement taxes on second homes.
The decision pushes back a reform that 57.7% of Swiss voters approved in a national referendum on 28 September 2025, and it overrides the Federal Tax Administration's recommendation that the change take effect in 2028. The delay has drawn sharp criticism from homeowner advocates, who accuse the government of ignoring a clear popular mandate.
The imputed rental value, known in German as Eigenmietwert, is a notional income that Swiss tax authorities assign to owner-occupied properties. Homeowners must declare this fictitious rent as taxable income, though they may offset it with deductions for mortgage interest and maintenance costs. The system has survived three prior referendum challenges, in 1999, 2004, and 2012, before voters finally scrapped it after more than 90 years.
What the reform changes
From 2029, owners of primary and secondary residences will no longer declare an imputed rental value on their federal tax returns. In exchange, most of the associated deductions disappear. Mortgage interest on owner-occupied homes will no longer be deductible, except for a limited first-time buyer allowance of CHF 10,000 per year for married couples and CHF 5,000 for singles, declining by 10% annually over a decade. Maintenance costs, energy-efficiency upgrades, and demolition expenses will also lose their deductibility at the federal level, though individual cantons may retain some environmental deductions until 2050 at the latest.
Rental properties are unaffected. Owners of investment properties will continue to pay tax on actual rental income and deduct related expenses. The reform also amends the Swiss Constitution to allow cantons to introduce a special property tax on owner-occupied second homes, a measure designed to offset revenue losses in tourism-dependent mountain regions.
Who wins and who loses
According to the Federal Tax Administration, approximately 82% of homeowners stand to benefit under current mortgage rates of around 1.5%. That share falls to 77% if rates reach 2%, and at roughly 3.5%, winners and losers roughly balance each other out.
The clearest winners are mortgage-free or low-debt homeowners, particularly retirees aged 64 and above, of whom 88% are expected to gain from the change. A retired couple with a fully paid-off home and an imputed rental value of CHF 25,200 could see their annual tax bill drop by approximately CHF 5,000, depending on their marginal rate. Owners of newer urban apartments also benefit, as these properties carry high imputed values but typically require little maintenance.
Highly leveraged owners, especially young families with large mortgages, face the opposite outcome. Under the current system, a couple with an CHF 850,000 mortgage at 3.5% can deduct CHF 29,750 in annual interest, an amount that often exceeds their imputed rental value. After 2029, both the deduction and the imputed value disappear, leaving these households worse off. Owners of older properties who rely on renovation deductions will also face higher net costs once those tax benefits end.
Second-home owners in mountain cantons such as Valais, Graubünden, and Ticino face a separate layer of uncertainty. Their cantons may impose the new property tax on second homes to recoup lost revenue, but no rates have been set. Valais alone projects a CHF 70 million annual shortfall from the reform and has warned that it intends to close the gap through the new levy.
The political geography of the vote
The September 2025 referendum exposed a sharp linguistic divide. Nineteen cantons voted in favour, with German-speaking Switzerland and Ticino delivering strong majorities. Schwyz recorded 68.6% support, and Glarus reached 70.1%. In the Romandie, resistance was fierce: Geneva rejected the measure by 66.1% to 33.9%. Basel-Stadt and Valais also voted no. The result revived the so-called Röstigraben, the political fault line between Switzerland's German- and French-speaking regions.
Despite the popular mandate, the path to implementation has been contentious. Mountain cantons lobbied Finance Minister Karin Keller-Sutter for a delay until 2030, citing the complexity of introducing the new second-home property tax. The Conference of Cantonal Finance Directors formally requested a 2029 start date. The Federal Tax Administration had backed 2028, pointing to the Tax Harmonisation Act's standard two-year transition period. In the end, the Federal Council chose 2029 as a compromise, rejecting the mountain cantons' push for 2030.
What happens next
Homeowners must continue declaring imputed rental values and claiming deductions through the 2028 tax year. The current rules remain fully in force until 31 December 2028. Tax advisors are urging clients with pending renovations to complete them before the deadline, warning that contractor demand could create bottlenecks as 2029 approaches.
In the cantons, legislative processes to design and potentially enact the new second-home tax are only beginning. Some cantons, including Aargau and Graubünden, have already launched preliminary legislative work. Others have yet to start. Because the property tax is optional and each canton sets its own rates and definitions, the fiscal landscape for second-home owners will vary significantly across the country.
The Federal Council's revenue planning already assumes a shortfall of up to CHF 400 million from 2029, though Keller-Sutter has cautioned that the final figure depends on interest rate levels and cantonal implementation choices. The overall revenue impact for all levels of government, Confederation, cantons, and communes combined, is estimated at roughly CHF 1.8 billion per year.
Gregor Rutz, president of the Swiss Homeowners' Association, has demanded that no further delays occur. Speaking after the April decision, he said his association would formally petition the Federal Council to reconsider and noted that cantons that had already begun legislative preparations showed the 2028 timeline was feasible. "A further delay must not happen," Rutz stated.