On 28 September 2025, the Swiss people voted to abolish the system of taxing rental value as theoretical income, while allowing cantons to introduce a new tax on second homes. In Switzerland, however, there is always a significant time lag between the day of the vote and the implementation of a new system, and a number of details still need to be straightened out.
To date, Switzerland and its cantons have levied an annual income tax on the hypothetical rental income of owner-occupied properties, whether these are primary or secondary residences. This particularly affects many owners domiciled abroad who own a chalet or holiday apartment in Switzerland since, in principle, these cannot be rented out to third parties. To offset this purely fictitious income (i.e., the rental value), taxpayers can deduct expenses from their taxable income, including bank loan interest, property maintenance and management costs, or even insurance premiums.
What is certain: In the future (that is, as from 2028, in principle), at federal level, the foreign owner of a second home, specifically, will no longer have to declare the rental value as income, but will also no longer be able to benefit from the various deductions listed above.
Time will tell how the cantons will amend their tax laws.
What is less certain: Because Switzerland has several levels of taxation (the federal level, but also cantonal and municipal levels), it is not currently possible to say precisely if and how the cantons will adapt their tax legislation. Generally speaking, foreign owners of second homes should expect to no longer have to declare rental value at cantonal level, and to lose all the income tax deductions previously available to them, although some may still remain. It will also be necessary to monitor which cantons decide to introduce a tax on second homes to offset the decrease in tax income following the abolition of the rental value tax. However, no predictions in this regard can currently be made.
In any case, it is worth remembering that the expenses incurred by the foreign owner and increasing the value of the property used as a second home will remain significant, but only in the context of the taxation of real estate gains (or capital gains tax) in the event of the resale of the property.
13 January 2026 / Philippe Frésard and Max Haizmann, Kellerhals Carrard, Bern (Switzerland)
