End of Imputed Rental Value

On September 28, 2025, Switzerland voted to abolish the imputed rental value. This major reform, expected to take effect no earlier than 2028, will significantly reshape the taxation of property owners.

However please note that the details of the application of this new law are still unknown and shall be confirmed progressively – for each canton – until the new law enters into force in a few years.

What Changes for Individuals

Starting in 2028, homeowners will no longer be taxed on a “notional income” (the imputed rental value).

This is good news for those with little or no mortgage debt, as their tax burden will decrease. However, the trade-off is the elimination of most deductions (mortgage interest, maintenance costs, and energy-efficient renovations).

Owners of properties requiring major renovation work will no longer be able to claim the corresponding tax deductions. Similarly, homeowners who remain heavily indebted will lose a key tax optimization opportunity.

Why Considering a Real Estate Company?

In this new environment, a real estate company (SI) offers several attractive advantages:

Deductibility of maintenance, renovation works and depreciation: for companies, such expenses remain deductible, whereas they will no longer be for individuals. Depreciation can be made and would be deductible.
Family wealth management: an SI facilitates joint ownership, estate planning, and intergenerational transfers.
Clear accounting follow up: expenses and investments are centralized and handled at the corporate level for tax purposes. Depreciation can be made and would be deductible.

Taxation of the Real Estate Company and Its Shareholders

The main pitfall to keep in mind regarding an SI is double taxation:

profits are first taxed at the company level,
then dividends distributed to shareholders are taxed a second time at the individual level,
this optimizes cash flow as the SI is only taxed at a rate between 11.9 % to 20.5 % depending on the canton where the real estate is located.

What to Do Before 2028?

There are still a few years left to prepare. Homeowners can take advantage of the current deductions for renovations or partially repay their mortgages before the new system takes effect.

This also allows each individual to determine how they can optimize their real estate ownership according to their situation.

In Summary

The end of the imputed rental value will simplify the tax system but remove many tax planning opportunities for individuals. In some cases, using a real estate company could bring real advantages—particularly through the deductibility of expenses. However, each situation must be carefully analysed, taking into account the risk of double taxation and the related administration fees of having a real estate company.

Should you have any questions or wish to discuss how to best optimize your situation under the upcoming reform, our experts will be pleased to assist you.