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Find out how imputed rental value is calculated, what cantonal differences there are and which deductions you can use to reduce your tax bill.
Switzerland is one of the few countries where owners pay tax on the apartments or houses they live in. We show you how the taxation of imputed rental value, which is currently still in force, works and how you can reduce the amount you pay.
Important: On 28 September 2025, the Swiss electorate voted on and approved the abolition of imputed rental value with 57.7% of votes in favor. You can read more about the planned reform and what it means for you in our article “What does the abolition of imputed rental value mean?”.
The imputed rental value corresponds to a notional amount that owners could earn when renting out their residential property. Owner-occupiers must pay tax on this value as income. According to the Federal Supreme Court, the imputed rental value must be at least 60% and may not exceed 70% of the market rent. It is determined by the cantonal tax authorities. Each canton is free to calculate imputed rental value as it sees fit.
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The concept of imputed rental value has been controversial for some time. Introduced in 1934 as an emergency measure to restructure the federal budget, a reform has been discussed for decades. For owners, it seemed absurd to have to pay tax on a “fictitious” income. Other points of criticism were the difficulties in ensuring equal tax treatment, the high level of bureaucracy and the creation of an incentive for borrowing. After repeated criticism, the National Council and the Council of States agreed on a change of system in December 2024, which has now been confirmed by the popular vote. By agreeing to the abolition of imputed rental value, the Swiss electorate has ended a long-standing debate and taken an historic step in tax policy.
The Bürgler family lives in the canton of Zurich and would like to find out the imputed rental value of their property. Here’s how they should calculate it:
Position | Position | Calculation | Calculation | Amount (CHF) | Amount (CHF) |
|---|---|---|---|---|---|
Position | Taxable income (parents 50% each) | Calculation | – | Amount (CHF) | 100,000 |
Position | Market rent (estimated) | Calculation | 3,000 × 12 | Amount (CHF) | 36,000 |
Position | Imputed rental value (70% of market rent) | Calculation | 36,000 × 0.7 | Amount (CHF) | 25,200 |
Position | Subtotal taxable income | Calculation | 100,000 + 25,200 | Amount (CHF) | 125,200 |
Position | Mortgage | Calculation | – | Amount (CHF) | 850,000 |
Position | Mortgage interest (1.5%) | Calculation | 850,000 × 0,015 | Amount (CHF) | –12,750 |
Position | Maintenance cost | Calculation | – | Amount (CHF) | –7,500 |
Position | Reduced imputed rental value | Calculation | 25,200 – 12,750 – 7,500 | Amount (CHF) | 4,950 |
Position | Final taxable income | Calculation | 100,000 + 4,950 | Amount (CHF) | 104,950 |
Swiss cantons have a certain amount of leeway when calculating imputed rental value. This means they can set the imputed rental value higher than the minimum of 60% set by the Federal Supreme Court. In addition, the cantons are free to choose the method for determining the rent used as a basis for the imputed rental value.
A total of eleven cantons use comparative rents as a basis. They calculate the imputed rental value on the basis of the market and local rents: Appenzell Innerrhoden, Appenzell Ausserrhoden, Glarus, Grisons, Lucerne, St. Gallen, Schaffhausen, Schwyz, Ticino, Uri and Valais.
Seven cantons use the individual valuation procedure, which means they calculate the imputed rental value using a hedonic model. In the hedonic valuation, the property value is derived from the actual sale prices of comparable properties: Aargau, Bern, Fribourg, Jura, Nidwalden, Obwalden and Thurgau.
The cantons Basel-Landschaft, Basel-Stadt, Geneva, Neuchâtel, Solothurn, Waadt, Zug und Zurich, on the other hand, have developed their own methods of valuation.
The tax authorities periodically reassess the imputed rental value of your property. It may well happen that they mistakenly set the imputed rental value too high. For example, changes to the building or its residential use (e.g. only partial occupancy) are not taken into account. It is therefore worthwhile to check the value in the tax assessment and compare it with previous years. If the imputed rental value has been calculated incorrectly, contact the relevant tax authority directly within the valid period (usually 30 days) to submit a written objection.
To compensate for the tax, as an owner, you can deduct costs that are directly related to the property from the imputed rental value. These include mortgage interest and maintenance costs. This significantly reduces the effective tax burden.
Each year you can choose whether to claim the effective costs or a lump-sum amount. In most cantons, the overall deduction is between 10 and 20% of the imputed rental value, depending on the age of the property.
Which costs can be deducted from the imputed rental value for tax purposes:
The tax burden resulting from imputed rental value depends heavily on the interest rates. If mortgage interest rates are low, the deductions for many owners are lower than the tax on imputed rental value. Only with interest above 2% and a loan-to-value ratio of at least 60% do the deductions exceed the tax.
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Imputed rental value is a complex element of the Swiss tax system. Owners must pay tax on a notional rental value as income, but can also deduct mortgage interest and maintenance costs. The amount of tax varies from canton to canton and depends heavily on interest rates.
The Swiss voted to abolish imputed rental value in the referendum on 28 September 2025. You can read more about the planned reform and how you can use the remaining time strategically and cushion the financial impact in our article ““What does the abolition of imputed rental value mean?”
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