Home and taxes

How much does it really cost to own (or rent) a home in Switzerland?

In Switzerland, owning a property is not just a matter of mortgages and bills.
It is also a matter of… taxes.
Many owners or buyers overlook a key factor: the tax impact of the property over time.
Yes, because in Switzerland:

• The tax value of the property is included in the calculation of your assets
• If you rent, the rent is included in your taxable income
• If you live in your home, you pay the so-called ‘imputed rent’ (theoretical rent for tax purposes)
  All of this affects your tax return, your annual tax burden, and even the real cost-effectiveness of the investment.

Here are three things you need to know (and check):

1.Tax value ≠ market value

• The tax value is set by the cantonal authorities and is usually much lower than the market value (typically 20–40% of the latter).
• It is used to calculate taxes such as wealth tax, imputed rent, and sometimes inheritance/gift tax.
• It is necessary to check periodically: if the tax value is updated, taxes may increase even without market changes.

2.Imputed rent: you live in your own home → you are still taxed

• In Switzerland, if you live in your own property, the tax authorities add the hypothetical value of the rent you could obtain (Eigenmietwert or valeur locative) to your taxable income, even if you do not receive any rent.
• The amount is calculated by the canton (usually between 60% and 70% of the market rent).
• However, you can deduct mortgage interest and maintenance costs (see point 3).

3.Deductions: it is important to understand the details

• The following are deductible:
  o Mortgage interest (full amount, up to certain limits)
  o Ordinary maintenance costs (repairs, painting, roof, insurance, management)
  o In many cantons, energy-saving measures, even if they increase the value of the property
• You can choose between:
  o Flat-rate deduction (10–20% of the rental value)
  o Deduction of actual expenses, upon presentation of invoices

Renovations, maintenance, mortgage interest: many costs are tax-deductible. But not all of them. And each canton has slightly different criteria.

Remember: in Switzerland, owning a property also entails ongoing tax responsibilities.
Those who make informed choices today will save (a lot) tomorrow.

Your anfina