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Imputed rental value in simple terms.
What is imputed rental value?
Imputed rental value is a Swiss tax system that is designed to even out the tax disadvantages of being a tenant compared to a property owner, as maintenance costs and interest payments on loans are tax-deductible for property owners. In return, they have to pay tax on a notional rental income. Switzerland is the only country in Europe to operate a tax system of this kind. Only Denmark, Luxembourg, the Netherlands, Italy and Spain have any kind of imputed rental value tax. However, the tax is either much lower than in Switzerland or is only paid on second homes.
How is imputed rental value calculated?
In Switzerland, imputed rental value is determined by the cantonal tax authorities and is based on the market rental value of similar properties. It is generally 60-70% of the typical rent for the area. Factors such as location, size, furnishings and year of construction impact the amount. Each canton has its own calculation model – some have blanket rates while others follow detailed valuation procedures. The tax office may provide an individual estimate, especially for modifications like conversions.
Example imputed rental value calculation
What others wanted to know.
Our property experts give an insight into a selection of the most frequently asked questions. You can submit your own question too. We will be happy to help you.
Rebecca B. (33), Liestal
How is imputed rental value taxed?
In Switzerland, imputed rental value is taxed as notional income and must be declared in your annual tax return – both for federal and cantonal tax.
This is how the tax works:
- Income tax: The imputed rental value is added to your other income, increasing your taxable income.
- Declaration: The amount is specified by the cantonal tax administration. In the event of discrepancies or modifications (e.g. property conversion), you can request a correction.
- Deductions: In return, mortgage interest, maintenance costs (e.g. for renovations) and insurance premiums can be deducted from your income, reducing your tax burden.
Rebecca B. (33), Liestal
How is imputed rental value taxed?
In Switzerland, imputed rental value is taxed as notional income and must be declared in your annual tax return – both for federal and cantonal tax.
This is how the tax works:
- Income tax: The imputed rental value is added to your other income, increasing your taxable income.
- Declaration: The amount is specified by the cantonal tax administration. In the event of discrepancies or modifications (e.g. property conversion), you can request a correction.
- Deductions: In return, mortgage interest, maintenance costs (e.g. for renovations) and insurance premiums can be deducted from your income, reducing your tax burden.
