Abolition of Imputed Rental Value in Switzerland: A New Era for the Engadin Market

A Turning Point for Owners and Buyers

On September 28, 2025, Swiss voters approved a historic tax reform: the abolition of imputed rental value. By 2027/28, this outdated system will be replaced by a transparent and simplified proportional property tax. For the Engadin - especially St. Moritz - this is not just a fiscal change, but a shift that redefines real estate investment value.

What is the imputed Rental Value?

Previously, homeowners were taxed as if they were earning rental income from their own home - a fictional income with real tax consequences. This disproportionately affected debt-free property owners, leading to criticism and calls for reform.

Example: A CHF 2 Million Home in St. Moritz

Currently, the owner pays about CHF 16,250 per year in imputed rental tax. Under the new flat tax system (0.3%), the owner will pay approximately CHF 6,000 – saving over CHF 10,000 annually.

Impact of the Reform: With and Without a Mortgage

Currently, mortgage holders benefit from tax deductions, while those who own their property outright pay more. Under the new reform, this discrepancy will disappear, everyone will be treated equally. Here’s the impact for a CHF 2 million property:

What This Means for the Market

• All owners taxed equally - no more advantage through mortgages

• Renovated homes increase in value (no more renovation deductions)

• Foreign buyers with capital will benefit the most

• Luxury demand will rise, especially in key destinations

• Municipalities like St. Moritz remain financially stable

Timeline of the Reform

1. 2025 – Nationwide vote passed

2. 2026 – Last year for renovation tax deductions

3. 2027/28 – New tax model goes into effect

FAQ – What You Should Know

• Can I still deduct renovations?

  Yes, but only until 2026/27

  
  

• What if I have a mortgage?

  Mortgage deductions will be eliminated, but total taxes will drop

  
  

• Is this a good time to buy?

  Yes - especially for capital-strong buyers

Conclusion – Why Now is the Time to Act

This reform levels the playing field and simplifies the process. The Engadin becomes even more attractive for second-home buyers and investors - with lower taxes and more transparency.

If you're a buyer with equity, now is the time to enter the market.If you're a homeowner, now is your last chance to benefit from renovation deductions and add value to your property.

The market rewards those who act early - turnkey properties will lead the trend.St. Moritz and similar destinations will continue offering the highest standards of living, infrastructure, and quality.

Whether buying or selling – Parli is your trusted partner in the Engadin.Contact us today for tailored advice.

Arch. Federico Parli

Abolition of Imputed Rental Value in Switzerland: A New Era for the Engadin Market