Vote of September 28, 2025: abolition of imputed rental value and introduction of a tax on secondary residences
On September 28, the Swiss people will vote on a major reform of the tax system: the abolition of the imputed rental value and the introduction of a cantonal tax on secondary residences.
This reform, which concerns both owners of primary and secondary residences, Swiss and foreign alike, will have significant repercussions on the entire population and on the fiscal balance of our country.
We encourage you to inform yourself and, for those who have the possibility, to go and vote.
Position of APCAV
A misleadingly good idea: although the abolition of the imputed rental value may seem attractive, we believe it is the result of clumsy political compromises that are likely to create more problems than they solve.
A legitimate goal but other possible means: relieving property owners, often retirees, who have repaid their debts but still have to pay tax on a fictitious income is defensible. However, this could be achieved differently (exemption from a certain age, reduction of imputed rental value on amortized properties, etc.).
Loss of deductions: the reform would eliminate the possibility to deduct mortgage interest as well as other passive expenses, for example those resulting from a Lombard loan or consumer credit, as well as maintenance and renovation costs, including in the field of energy efficiency (with possible cantonal exceptions).
A brake on the energy transition: by removing tax incentives for energy renovations, this reform clearly goes against Switzerland’s climate objectives.
Increased risk of undeclared work: without the possibility of deducting renovation costs, some owners could turn to undeclared work, to the detriment of the official economy and construction quality.
A danger for the construction sector: already weakened by the Lex Weber, this sector essential to the Valais economy would once again be undermined, even though it represents nearly 20% of cantonal GDP and more than 10% of jobs.
A reform that risks penalizing the middle class: already weakened by the rising cost of living, it would suffer a shift of the tax burden to the benefit of other groups.
Historical reminder: what is the imputed rental value?
Introduced in 1934 (Confederation) and in 1945 (Canton of Valais), the imputed rental value aims to prevent homeowners from being too advantaged compared to tenants who must pay rent. Homeowners are considered to have an economic advantage, and the role of imputed rental value is to offset this inequality.
It corresponds to the theoretical annual income that a property could generate if it were rented out. In Valais, the gross imputed rental value is set at 60% of the market rent, then reduced by 20% to determine the taxable base. Note that in Valais, imputed rental values are relatively low and are expected to rise in the future if the reform project is rejected. Currently, in the Commune of Val de Bagnes, the imputed rental value is revised only in the case of a sale or transformation, although it could theoretically be reviewed every two years.
Three reform projects have already failed in previous votes (1999, 2004, 2012).
What does the September 28, 2025 réforme propose?
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Abolition of the imputed rental value: owner-occupiers would no longer be taxed on this fictitious income.
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New cantonal tax on secondary residences: cantons could introduce a targeted property tax to compensate for lost revenue. This requires an amendment to the Swiss Constitution. This is the principle we will vote on September 28. A double majority of the people and cantons is required. If the reform is accepted, it is very likely that Valais will introduce a new tax on secondary residences (property tax). However, we do not yet know how this tax would be calculated.
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End of deductions: no more deduction of mortgage interest, maintenance costs, renovations, or energy-saving measures at the federal level. Cantons could maintain certain deductions for energy-saving and environmental protection measures, but only until 2050.
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Abolition of passive interest deductions: currently, it is possible to deduct all passive interest (Lombard loans, consumer loans, bank loans, or other private debts) up to the amount of income from movable and immovable assets, plus a lump sum of CHF 50,000. With the reform, these deductions would disappear, which means that taxpayers who are not property owners but who have contracted other forms of credit would also be affected.
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Transitional measure for first-time buyers: to avoid penalizing young households acquiring property for the first time, it would still be possible to deduct part of the mortgage interest when purchasing a first primary residence. This deduction would be capped at CHF 10,000 the first year for a couple (CHF 5,000 for a single person). It would gradually decrease each year and disappear after 10 years. This would not apply to secondary residences.
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Legal link: if the tax on secondary residences is rejected, the abolition of the imputed rental value cannot come into force.
Note that properties rented out will continue to be taxed as today, based on the actual rental income (rents received), and expenses related to the property (maintenance, mortgage interest, etc.) will remain deductible in proportion to the declared rental income.
Arguments in favor of YES
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Abolish a tax on a fictitious income considered unfair.
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Discourage indebtedness: today, those who keep a mortgage or go into debt are “rewarded” fiscally. Those who repay are penalized.
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Relieve retirees, often debt-free but still taxed on an increasing imputed rental value, which often represents a large share of their income once retired.
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Facilitate access for young property owners, thanks to the temporary deduction of mortgage interest.
Arguments in favor of NO
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Slowdown in energy renovations, which are nevertheless crucial for the energy transition.
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Brake on property maintenance: without deductions, some owners might postpone work or turn to undeclared work (estimated at CHF 0.5 billion/year).
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Negative impact on the construction sector, a pillar of the Valais economy (20% of cantonal GDP, more than 10% of jobs). After the Lex Weber, this sector could face another shock.
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Risk of higher taxes for the middle class, for secondary residence owners, and indirectly, for tenants if municipalities compensate for lost tax revenue.
Who would be the winners if YES?
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Owners without debts or renovation needs, especially retirees.
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Luxury primary residences: their taxable income would drop significantly.
Who would be the losers if YES?
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The middle class, which takes on debt to buy housing and whose financial model relies on the deductibility of interest and renovation costs.
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Public authorities: estimated losses of CHF 2 billion at the national level and CHF 70 million for Valais (half canton, half municipalities). The shortfall, however, will depend on interest rate levels.
Whether this reform will benefit homeowners therefore largely depends on each taxpayer’s individual situation: level of debt, age, type of property, renovation needs, primary/secondary residence, etc. It is therefore difficult to draw a general conclusion for all owners. This also explains the strong differences of opinion, including within political parties.
And what about rented properties?
It is important to note that the reform only concerns owner-occupied housing. Rented properties will continue to be taxed as today, based on actual rental income (rents received).
In this case, the tax regime remains unchanged: rents remain taxable and expenses related to the property (maintenance, mortgage interest, etc.) remain deductible in proportion to the actual rental income.
Spécial case: owners who rent their property part of the year
Many owners occupy their property part of the year and rent it out the rest of the time.
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For the period of personal occupation, the property would no longer generate taxable imputed rental value if the reform passes.
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For the rental period, actual rents would remain taxable and the corresponding expenses deductible in proportion to the actual declared rental income.
In summary, as soon as a property generates actual rental income, it continues to be subject to tax, regardless of the reform.
Conséquences for people benefiting from lump-sum taxation
For people domiciled in Switzerland but not working in the country, the imputed rental value currently constitutes an important basis for calculating their tax:
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The taxable amount is set at a minimum of 7 times the imputed rental value of the main residence.
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In Valais, the minimum amount is CHF 250,000 for cantonal and municipal tax and CHF 400,000 for federal tax.
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These amounts can lead to high taxable bases, especially for luxury mountain chalets.
If the imputed rental value disappears, it would nevertheless continue to serve as a basis for determining the minimum amount on which the lump-sum tax is calculated.
Conclusion
The September 28, 2025 vote affects far more than just property owners. It raises the question of balance between tax fairness, public finances, and support for the middle class.
APCAV believes this reform is a misleadingly good idea, which risks creating more imbalances than it corrects. But in the end, it is up to each citizen to form their own opinion.
We strongly encourage you to inform yourself and, if you can, to exercise your right to vote on September 28.
We also remain at your disposal for any questions regarding this important reform of our tax system.
Analysis written by Brigitte Borel, President of APCAV – August 24, 2025