Abolition of Property Value Tax from 2029 (cross-border guide)

Di Valerie Linc · Published on

As of January 1, 2029, the property value tax will be abolished for private residences, as decided by the Federal Council.

Contesto

TL;DR - Property value tax for owner-occupied homes abolished from 2029 - Cantons can introduce up to 3.5% tax on secondary homes - Maintenance deductions for owner-occupied homes will disappear - Mortgage interest deductions will be limited to rented portions ## Key facts - Effective Date: January 1, 2029 - Reform Approval: February 9, 2025 - Ticino Fiscal Loss: CHF 210 million annually - Secondary Home Tax: Up to 3.5% on secondary homes - Legislation Deadline: December 2028 - First-time Buyer Limit: CHF 5,000/year for 10 years on mortgage interest - Energy Deduction Cap: CHF 15,000 per intervention in Ticino - Non-residential Tax: Reduced property value tax of 50% ### 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 (...

Dettagli operativi

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: -...

Punti chiave

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...

Punti chiave

[{"q":"When will the tax on rental value be abolished in Switzerland?","a":"The tax on rental value will be abolished as of January 1, 2029."},{"q":"How will the Cantons be compensated for the resulting tax losses?","a":"The Cantons will be able to introduce a special tax of up to 3.5% on secondary homes used primarily for personal purposes."},{"q":"What will happen to deductions for ordinary maintenance expenses?","a":"Deductions for ordinary maintenance expenses will be abolished for owner-occupied properties, but will remain mandatory for rented properties."},{"q":"How will mortgage interest be treated for owner-occupied properties?","a":"Mortgage interest will only be deductible for the portion related to rented properties. For first-time homebuyers, the maximum deduction will be CHF 5,000 per year for 10 years."},{"q":"What will happen to federal deductions for energy efficiency?","a":"Federal deductions for energy efficiency will be abolished, but the Cantons may retain them with a cap of CHF 15,000 per measure."}]

Frequently Asked Questions
When will the tax on rental value be abolished in Switzerland?
The tax on rental value will be abolished as of January 1, 2029.
How will the Cantons be compensated for the resulting tax losses?
The Cantons will be able to introduce a special tax of up to 3.5% on secondary homes used primarily for personal purposes.
What will happen to deductions for ordinary maintenance expenses?
Deductions for ordinary maintenance expenses will be abolished for owner-occupied properties, but will remain mandatory for rented properties.
How will mortgage interest be treated for owner-occupied properties?
Mortgage interest will only be deductible for the portion related to rented properties. For first-time homebuyers, the maximum deduction will be CHF 5,000 per year for 10 years.
What will happen to federal deductions for energy efficiency?
Federal deductions for energy efficiency will be abolished, but the Cantons may retain them with a cap of CHF 15,000 per measure.

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