Abolition Rental Value Tax 2029 | Frontaliere Ticino
Abolition Rental Value Tax 2029 — free tools and expert guides for cross-border workers (frontalieri) between Switzerland and Italy. Compare salaries, tax, LAMal health insurance, pensions, and cost of living in Ticino. Updated 2026.
Context
Abolition of Property Value Tax from 2029 The Federal Council confirmed on Wednesday the abolition of the property value tax for owner-occupied homes, with binding effect from January 1, 2029. The reform, approved by the people and cantons on February 9, 2025 with 55.7% of the votes, will definitively eliminate the property value tax at the federal, cantonal, and municipal levels. To compensate for the estimated annual fiscal losses of CHF 210 million for Ticino (source: Department of Finance and Economy TI), the cantons will be able to introduce a special tax up to 3.5% on secondary homes primarily used for personal purposes. The Confederation grants the cantons two years to adapt the legislation, with a deadline of December 2028. The Executive has accepted the request of the Conference of Directors of Cantonal Finance, led by Christian Vitta from Ticino, to postpone the entry into force to 2029: > "The deadline is essential to harmonize the tax systems without penalizing municipal budgets." ### Compensations and Deductions With the abolition, the deductions for ordinary maintenance expenses (e.g. painting, plumbing repairs) for owner-occupied homes will disappear, while they will remain mandatory for rented properties. For mortgage interest: - Deductibility limited to the percentage of leased surface (e.g. if 30% of a villa in Morbio Inferiore is rented, only 30% of the interest is deductible). - First-time homebuyers: maximum deduction of CHF 5,000/year for 10 years on mortgage interest (art. 25a LIFD). - Abolished federal deductions for energy efficiency (e.g. solar panels or boiler replacement), but cantons can maintain them with a ceiling of CHF 15,000 per intervention (in Ticino, Energy Law 2023 art. 12). ### Practical Impact in Ticino Checklist...
Operational details
The reform of the property value tax introduced by the Swiss Parliament will have a significant impact on the Ticino real estate market, where the property value tax represents an important voice in the tax system. According to data from the Federal Department of Finance, in 2025, the property value tax generated around CHF 350 million in national revenues. The Cantons will now need to assess the introduction of a special tax on secondary residences, which could affect areas such as Lugano, Ascona, and Locarno, where the presence of secondary residences is high. ### Comparison with the current system Currently, the property value tax applies to the theoretical rental value of a property. From 2029, this burden will be eliminated, but new rules for deductions will be introduced. For example, mortgage interest will only be deductible for the portion related to rented properties. For those who have a mortgage on a property, this change could result in an increase in tax pressure. The Cantons will have the option to maintain deductions for energy-saving interventions, but with time limitations. The new regulation provides that properties used for non-residential purposes, such as shops, offices, and industries, will be subject to a reduced property value tax of 50%. This measure could negatively affect property owners, such as those on Via S. Agostino in Lugano, who could suffer a reduction in income. The Ticinese municipalities of Bellinzona, Chiasso, and Lugano will need to adapt to the new fiscal rules and assess the opportunity to introduce a special tax on secondary residences. According to experts, this measure could generate around CHF 20 million in annual revenues for the municipality of Lugano. Here is a checklist of operational steps for Ticinese municipalities: -...
Key points
Abolition of the property tax from 2029: what it means for property owners in Ticino The ongoing fiscal reform in Ticino will bring significant changes for property owners, particularly those planning to buy or manage a second home. Starting from 2029, the property tax will be abolished, but this does not mean that property owners will no longer have to worry about taxes. On the contrary, they will need to check with their municipality to see if there are any special taxes on second homes and plan their fiscal situation carefully. ### Special taxes on second homes The reform does not cancel the municipal tax on properties (ICI), but introduces a new type of tax for second homes. For example, the city of Lugano has already announced the introduction of a special tax on second homes starting from 2029. This tax will be applied to properties that are not used as the primary residence and are registered in the name of individuals or companies that do not have their primary residence in the municipality. To illustrate this, let's assume that a Swiss citizen owns a second home in Lugano, which is not used as the primary residence. The property is registered in the name of the citizen and has a value of CHF 500,000. The special tax on second homes will be applied at a rate of 1% of the property's value, resulting in an annual tax of CHF 5,000. ### Deductions for mortgage interest The reform limits the deductions for mortgage interest for property owners. Currently, property owners can deduct mortgage interest from their taxable income, but starting from 2029, the deduction will be limited to 50% of the mortgage interest. This means that property owners will have to pay a higher amount of taxes. To illustrate this, let's assume that a property owner in Bellinzona has a m...