Who benefits from the abolition of the owner-occupied property value tax?

On September 28, 2025, a vote will be held – but to everyone’s surprise, it will not be on the owner-occupied property value, but on the “Bundesbeschluss über die kantonalen Liegenschaftssteuern auf Zweitliegenschaften”. Why that? The federal parliament already decided to abolish the owner-occupied property value (Eigenmietwert) in December 2024. However, because many mountain cantons would suffer high tax losses due to the large number of second homes, they will now be allowed to introduce a so-called property tax to compensate for the losses. However, the “permission” for this new tax is inextricably linked to the abolition of the imputed rental value: a “no” vote on this proposal is therefore also a “no” to its abolition.

SVIT Schweiz and the Hauseigentümerverband (HEV) are actively campaigning for a “yes” vote. SVIT writes that the tax has a decisive drawback: “It taxes fictitious income – i.e., income that the homeowners affected have not actually earned. This becomes a trap, especially in old age. Progressive taxation and the level of taxable income penalize all those who have continuously reduced their mortgage burden in order to live a carefree life in old age.”

Who stands to gain – who stands to lose?

In short: According to an analysis by the federal government, around 82 percent of all homeowners with a mortgage rate of around 1.5 percent would benefit from the change in the system, including, in particular, senior citizens with low mortgages.

VZ VermögensZentrum has now summarized in detail on its website who would benefit from a system change and who would not, describing two scenarios and providing valuable tips on how homeowners should respond to the system change.

Scenario for new buyers and retirees:

Without imputed rental value, the tax burden generally decreases with today’s low mortgage interest rates. Many retirees benefit if their imputed rental value accounts for a high proportion of their taxable income. In addition, mortgages are often largely amortized, and maintenance is limited to the bare minimum. New buyers benefit from the fact that a limited debt interest deduction remains possible in the first ten years and maintenance costs are still low.

Scenario for properties in need of renovation:

If renovation costs are high, the abolition of the owner-occupied property value will be less welcome for owners of older properties or those in need of renovation. Investments to maintain value and the maintenance allowance would no longer be deductible in future.

VZ’s conclusion: “The current system favors homeowners who have high interest and maintenance expenses. If the owner-occupied property value were abolished, they would be worse off in terms of taxation.”

In general, whether you personally benefit from the abolition depends very much on your income and asset situation and the condition of your property. In addition, the advantages and disadvantages change with the applicable mortgage interest rates. If these rise significantly again, the advantages of abolishing the imputed rental value will decrease significantly, as these were deductible under the old system.

Tax revenues will fall with the change in the system

With interest rates at their current low levels, one thing is certain: the change in the system will reduce tax revenues for the federal government, cantons, and municipalities. The Federal Tax Administration expects a shortfall of CHF 1.8 billion per year if mortgage interest rates remain at their current level of around 1.5 percent. Around CHF 400 millions of this is federal tax, with the remaining CHF 1.1 billion accruing to the cantons and municipalities. This does not consider the introduction of any property taxes in the cantons. However, if mortgage interest rates rise above 3 percent again, the public sector would benefit from additional revenue. In the currently more likely scenario of mortgage interest rates at around 1.0 percent, the tax administration estimates tax losses of around 2.5 billion.