Impact on House Valuations
The housing market in Switzerland is gearing up for a significant change, with a vote scheduled for September 28, 2025, that could potentially revise the imputed rent system. According to the latest polls, around 60% of the population support the reform, while about a third reject the proposal. The rest are still undecided.
The vote on these proposals is about the entire reform, and if the special property tax is rejected, the taxation of imputed rent will remain in place. The Eigenmietwert (imputed rent) system, which has been a topic of debate, is being questioned by some, such as Matthias Pflume, Head of Extras & Consulting Text Editor, who argue it is flawed. On the other hand, Dominique Strebel, Editor-in-Chief, supports the system, asserting it is fair.
Immigration and persistently low interest rates have been causing a constant supply shortage in the housing market, leading more tenants to aspire to become owners. This situation has prompted the debate on the imputed rent system and the upcoming vote.
The revision of the imputed rent is expected to give the real estate market additional momentum, especially with persistently low interest rates. However, new construction is likely to become more expensive due to the tax relief, as the capital released partly flows into more expensive objects. This could lead to a stagnation or even a decrease in prices for old buildings regionally.
Support for the reform is high among the general population, but the political left is resisting the project. If the system change is approved, homeowners would benefit from the reform, on average, according to real estate consultancy Wuest Partner. However, the adjustment of the tax regime may have a muted effect on real estate prices, according to real estate expert Donato Scognamiglio.
On September 28, two interconnected proposals will be voted on: one concerning the abolition of the imputed rent and the reduction of deductions, and the other about whether cantons may levy a special tax on second homes, with a constitutional amendment needed for the latter. Long-term investments in single-family homes are expected, despite the potential revision of the imputed rent.
The current polls show a tightening race for the planned abolition of the Eigenmietwert in Switzerland, with support slipping below 50% in some surveys shortly before the September 28, 2025 vote. Recent polls indicate about 51% support with 45% opposed, but the opposition is gaining ground rapidly, making the outcome uncertain and potentially a close call.
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