Eigenmietwert Explained: How Swiss Imputed Rental Value Affects Homeowners

Estimated reading time: 3-4 minutes

Written by David Rosbotham DipPFS | Financial Planner

Eigenmietwert, or imputed rental value, is a unique feature of the Swiss tax system that affects all homeowners. If you own and live in your property, the tax authorities assign a notional rental income to your home, which increases your taxable income. In this article, we explain how Eigenmietwert works, why it matters for mortgages and financial planning, and what the proposed 2025 reforms could mean for homeowners.

What Is the Eigenmietwert (Swiss Imputed Rental Value)?

Eigenmietwert (French: valeur locative), or imputed rental value, is a Swiss tax rule that treats living in your own home as taxable income. Homeowners must declare a notional rental amount, increasing taxable income but allowing deductions for mortgage interest and maintenance costs.

If you own and live in your own property, you don’t pay rent. The Swiss tax authorities view this as a form of benefit, because you are effectively saving money compared to renting. To account for this, they assign a fictitious rental income to your home, which is then added to your taxable income.

This applies to all homeowners who occupy their property themselves (primary residence), whether it’s an apartment or a house. It does not apply to rented-out properties, since rental income is already taxed directly.

The calculation is usually based on what your property could rent for in the open market, with cantons applying their own rules and percentages.

Why Eigenmietwert Matters for Swiss Homeowners?

Impact of Eigenmietwert on Mortgages and Retirement

This system has a direct impact on financial planning:

Higher taxable income: Even if you have no tenants, the imputed rental value increases your declared income, often leading to higher tax bills.
Encourages mortgage debt: Since the system allows deductions for mortgage interest and certain maintenance and renovation costs, many homeowners keep their mortgage debt instead of paying it down quickly.
Challenges for retirees: Retirees who have paid off their mortgage often feel penalised, as they no longer have interest deductions but still face taxation on imputed rental value.

The Debate Around Abolishing Eigenmietwert

The Eigenmietwert has been debated for decades. Critics argue it is unfair, outdated, and distorts financial planning decisions. Proponents claim it ensures fairness between renters and owners, and prevents wealthier households from escaping taxation.

There have been several notable reform attempts:

2012 Popular Initiative – “Secure Housing in Old Age” (Sicheres Wohnen im Alter): Proposed tax relief for older homeowners by abolishing the Eigenmietwert for them. It was put to a nationwide vote on 23 September 2012 and was rejected by both the people and the cantons.
2017 Parliamentary Initiative – “Systemwechsel bei der Wohneigentumsbesteuerung”: Launched to change homeownership taxation by abolishing the Eigenmietwert for owner-occupied residences. This proposal led to years of discussion in Parliament but stalled over disagreements about deductions, especially mortgage interest.
Recent Developments: Parliament eventually passed a Federal Decree in 2024/2025 linking cantonal property tax powers with the potential abolition of the Eigenmietwert. This is what will now go to a public vote in September 2025.

Swiss September 2025 Vote on Eigenmietwert Reform

On 28 September 2025, Swiss citizens will vote on proposals that include the abolition of the Eigenmietwert system. At the same time, the ballot includes a Federal Decree on Cantonal Property Taxes on Second Homes, which would give cantons new authority to levy taxes on owner-occupied second homes. These homes are specifically targeted because they do not generate rental income but still represent tied-up wealth and create local infrastructure costs. Together, these measures represent a fundamental change to how property ownership is taxed:

Second-home owners could face new cantonal taxes.
Mortgage strategy may shift, as deductions for interest could disappear.
Household financial planning will need reassessment, especially for long-term homeowners and retirees.

Financial Planning Steps for Homeowners in Switzerland

Review your mortgage strategy: Consider whether maintaining or reducing debt aligns better with potential reforms.
Plan for different tax scenarios: Think about how the abolition of Eigenmietwert could affect your annual tax liability.
Stay informed: Use official resources like admin.ch for up-to-date information.

Bottom line: The Eigenmietwert isn’t just a technical tax detail, it directly affects mortgages, household budgets, and retirement planning. With the September 2025 vote approaching, now is the time for homeowners and expats in Switzerland to factor potential changes into their financial plans.