Abolition of imputed rental value: what really changes with the 2029 reform?

On 28 September 2025, the Swiss electorate approved the abolition of the tax on imputed rental value. The Federal Council has set its entry into force for 1 January 2029, for primary and secondary residences alike. From that date, the notional rental income is no longer taxed — but in exchange, the federal deductions for maintenance costs, energy-efficiency renovations and mortgage interest disappear for owner-occupied homes. Until 2029, the current regime continues to apply in full.

This is not a rate adjustment. It is the end of a rationale.

For decades, the taxation of property rested on a balance: a notional income taxed on one side, deductible charges on the other. Many estates were structured around this mechanism — mortgage debt deliberately maintained because its interest reduced the tax bill. That balance disappears. From 2029, holding debt on one's primary residence in order to deduct the interest loses its fiscal rationale.

Two exceptions remain at federal level. First-time buyers retain an interest deduction, capped at 10,000 francs for a couple and 5,000 for a single person, reduced by 10% per year over ten years. And rented properties keep the deductibility of their charges. For the owner who occupies their home and has largely paid it off, however, the change is clear-cut.

The cantonal dimension adds a measure of uncertainty. Cantons may retain, for their own taxes, the deductions tied to energy-efficiency renovations until 2050. Geneva is expected to do so, but the terms are not yet settled. The canton rejected the reform by more than 66%, without thereby escaping its application.

What is essential, though, is not fiscal. The decision whether or not to repay mortgage debt is not an isolated one: it bears on taxable wealth — particularly in Geneva, where it is the heaviest in the country — on available liquidity, and on the balance with pension provision. Reducing debt by drawing on pension assets or a life-insurance policy shifts the burden elsewhere; doing so with bank liquidity does not. The trade-off therefore holds only when examined as a whole.

The question is not what you lose in 2029. It is what the structure of your wealth is worth without this regime.

Can I still deduct my mortgage interest after 2029 ?

For a home you occupy, no — unless you are a first-time buyer (a capped deduction, degressive over ten years) or the property is rented out. The general deduction of interest on a primary residence disappears.

Does the reform affect second homes ?

Yes. Imputed rental value is abolished for them too. In exchange, cantons will be able to introduce a specific property tax on second homes in personal use.

Should you act before 2029 ?

Until the reform takes effect, the current deductions remain valid — including for maintenance and renovation work. The transition period opens a window, but any decision to repay debt or renovate early brings other parameters into play (wealth, liquidity, pension provision) and is better weighed as a whole than on tax grounds alone.