Imputed rental value ends in 2029: Should owners sell their house before then or wait?
A couple has owned a single-family house in the canton of Zurich for 25 years. The children have moved out. The house has now become too large. Major renovations are due. The owners have been considering selling for some time and moving into a smaller apartment. Then they hear about the abolition of the imputed rental value.
From 2029, owners will no longer have to pay tax on an imputed rental value for owner-occupied residential property.
At first, this sounds like financial relief.
At the same time, however, important tax deductions will disappear.
Suddenly a new question arises:
Should we sell our house before 2029, or would it be better to wait?
Should we sell our house before 2029, or would it be better to wait?
The answer depends on several factors. The tax reform changes the ongoing taxation of residential property, but it does not automatically make selling a property more attractive sooner or later.
This example is fictional and is provided for illustration purposes.
1. What will change regarding the imputed rental value from 2029?
Until now, owners who live in their own property have had to declare a so-called imputed rental value as taxable income.
This is a calculated rental value for the owner-occupied property.
In return, under certain conditions, mortgage interest and value-preserving maintenance costs, for example, can be deducted for tax purposes.
This system is being fundamentally changed.
The Federal Council has decided that the reform will come into force on 1 January 2029.
From that date, the taxation of imputed rental value will no longer apply to owner-occupied primary and secondary residences.
At the same time, deduction options will be restricted.
The Federal Tax Administration confirms the following changes in particular:
- The imputed rental value for owner-occupied residential property will be abolished.
- Maintenance costs for owner-occupied properties will generally no longer be deductible.
- The deduction for debt interest will be severely restricted.
- First-time buyers of residential property will be granted special, time-limited deduction options.
- Cantons may, under certain conditions, continue to provide time-limited deductions for energy-saving and environmental protection measures.
- For predominantly owner-occupied second homes, cantons may introduce a special property tax.
The details follow from the adopted reform and its cantonal implementation. EStV
2. Will all homeowners benefit from the abolition?
No.
Whether the reform is financially advantageous depends heavily on the personal situation.
The existing mortgage, the interest burden and the amount of previous tax deductions are particularly important.
Example A: A largely paid-off single-family house
A couple owns a house with a small remaining mortgage.
The annual mortgage interest is correspondingly low.
No major maintenance work is currently pending either.
Until now, the couple had to pay tax on the imputed rental value, but could only deduct comparatively low costs.
For owners in this situation, the abolition of the imputed rental value can mean tax relief.
Example B: A house with a high mortgage
Another family owns a property with a high mortgage.
They therefore pay more mortgage interest.
Until now, they were able to claim this for tax purposes within the legally permitted framework.
The reform will restrict these deduction options.
Whether the family benefits overall therefore depends on their individual tax situation.
Important: The abolition of the imputed rental value does not automatically mean that every homeowner will pay less tax.
3. Should you therefore sell your house before 2029?
The short answer is:
Not solely because of the imputed rental value reform.
Selling a property is a far-reaching financial decision.
The tax treatment of ongoing owner-occupation is only one factor.
The key factors include in particular:
- your personal housing situation;
- future financial affordability;
- the condition of the property;
- upcoming renovations;
- the existing mortgage;
- regional demand;
- the possible net proceeds.
Anyone who wants to sell their house anyway should factor the reform into their planning.
4. Particularly important: renovations before 2029
One of the biggest changes concerns the tax treatment of maintenance costs.
Until now, owners have been able to deduct certain value-preserving expenses for tax purposes.
With the reform, this deduction will generally no longer apply to owner-occupied residential property from 2029.
This may be relevant for owners planning major renovations.
Example: A heating system needs to be replaced
A single-family house has an older heating system.
The owners are considering replacing it in the coming years.
At the same time, they are thinking about selling the property.
Several questions now arise:
Should the heating system be replaced before 2029?
Is the investment worthwhile at all if the house will soon be sold?
Would a buyer prefer to modernise the property themselves?
Two different considerations meet here.
The first is tax-related.
The second concerns the real estate market.
Even if a renovation is tax-deductible, that does not mean it makes economic sense.
An investment of CHF 40,000 does not automatically lead to a sale price that is CHF 40,000 higher.
Owners should therefore assess tax benefits and possible effects on the sale price separately.
5. Renovate or sell in the existing condition?
Anyone who wants to sell their house should not automatically bring forward all upcoming renovations.
A new heating system can be attractive to certain buyers.
Other interested parties may already be planning a comprehensive refurbishment anyway.
The same applies to the kitchen, bathrooms, windows or building envelope.
A meaningful comparison therefore considers two scenarios.
Scenario A: Sale without major renovation
The property is marketed in its existing condition.
Buyers take the need for renovation into account when deciding on the price.
The owners first invest in the property.
It is then offered in a correspondingly changed condition.
Which option makes more economic sense depends on the costs, the tax treatment and the additional price that can actually be achieved.
A local real estate agent can assess the marketing perspective. For the tax implications, qualified tax advice is advisable.
6. What happens to property gains tax?
One important point is often confused.
The abolition of the imputed rental value concerns the ongoing taxation of residential property.
Property gains tax, by contrast, is a tax on the taxable gain when a property is sold.
Anyone selling their house must therefore still check whether property gains tax is due and, if so, how much.
The specific burden depends in particular on the canton, the investment costs, the length of ownership and the deductible expenses.
When changing properties, a tax deferral may be possible under certain conditions.
Owners should therefore have the potential net proceeds calculated before deciding to sell.
7. Will properties automatically become more valuable because of the reform?
This question cannot be answered in general terms either.
A lower ongoing tax burden could make owner-occupied residential property more attractive to certain buyers.
At the same time, the loss of deductions may put other buyers under financial pressure.
In addition, demand for residential property is influenced by many other factors.
These include:
Mortgage interest rates: They influence financing costs.
Affordability: Banks check whether buyers can finance a property over the long term.
Supply: In regions with scarce housing, demand may remain high.
Location: Price development differs between municipalities and neighbourhoods.
Condition: Energy efficiency and the need for renovation influence a property’s attractiveness.
It would therefore not be credible to promise owners rising sale prices from 2029 solely because of the tax reform.
8. Three typical situations for homeowners
Situation A: The house is paid off and still suits the owners
The owners enjoy living in their house.
The ongoing costs are affordable.
No major renovations are immediately pending.
In this case, the abolition of the imputed rental value can be an additional reason to maintain the current living situation.
A sale is not necessary simply because the tax rules are changing.
Situation B: The house has become too large
The children have moved out.
The single-family house increasingly requires maintenance.
The owners would like to move into a smaller apartment in the long term.
Here, the tax reform alone should not determine the decision.
More important are the possible sale proceeds, the costs of the new home and the desired lifestyle.
Situation C: Major refurbishments are pending
The roof needs to be replaced.
The heating system is outdated.
Windows and the facade may also require investment.
At the same time, the owners are considering selling the house.
In this situation, a careful comparison is worthwhile.
Which renovations are necessary?
Which costs can be taken into account for tax purposes?
Which investments could actually influence the sale price?
And could selling in the existing condition possibly make more economic sense?
9. Why several agent assessments can be helpful
Especially with older properties, the proposed sales strategies can differ.
One real estate agent may recommend targeted renovations before the sale.
Another may want to market the property in its existing condition.
A third may suggest a different buyer approach or pricing strategy.
None of these recommendations is automatically right or wrong.
What matters is how it is justified.
Owners should therefore not only ask:
“How much is my house worth?”
But also:
10. How Makli supports homeowners in their sales decision
Anyone considering selling a property does not have to research and contact every real estate agent individually.
At Makli, choosing an agent works differently.
Owners enter their property once on the platform free of charge.
Suitable agents can then submit concrete offers for the sales mandate.
This makes it possible to compare different price estimates, marketing strategies, services and terms.
This comparison can be particularly interesting for properties in need of renovation.
After all, owners do not only want to know which agent charges the lowest commission.
They want to understand which strategy could make sense for their property.
You do not search for an agent. Agents apply to you.
The decision remains with the owner.
11. What homeowners should specifically review before 2029
Anyone thinking about selling should clarify three things at an early stage.
First: the personal tax situation.
How is the reform expected to affect the ongoing tax burden?
Second: investment planning.
Which renovations are pending and which of them make economic sense?
Third: the potential sale proceeds.
What could the property achieve in today’s market, and what costs would arise in the event of a sale?
Only once these three areas have been considered can a more informed decision be made as to whether selling before or after 2029 could make sense.
Conclusion: The imputed rental value reform is a reason to plan, not an instruction to sell
From 2029, the taxation of owner-occupied residential property in Switzerland will change fundamentally.
The imputed rental value will be abolished.
At the same time, important tax deductions will be restricted.
For some owners, this may mean relief.
For others, it may result in financial disadvantages.
Anyone who wants to sell their house anyway should therefore include the reform in their planning.
However, the decision should not depend solely on a tax date.
More important are the personal life situation, the condition of the property, regional market conditions and the potential net proceeds.
A good time to sell does not arise from a change in the law alone. It results from the interplay of personal circumstances, financing and a realistic sales strategy.
Are you considering selling your property before 2029?
Suitable real estate agents can apply to you with concrete offers.
Compare price estimates, sales strategies, services and terms – without obligation and without pressure to sell.
You decide for yourself whether you want to sell and which agent you want to work with.