Impact on Real Estate Values
On September 28, Swiss voters will decide on two proposals related to the reform of property tax, as reported by Cash on August 29, 2025.
The first proposal aims to abolish the Eigenmietwert (imputed rental value tax) and reduce maintenance deductions. UBS real estate specialist Claudio Saputelli suggests that the reform of the imputed rent gives the real estate market additional momentum, especially with continued low interest rates. However, the elimination of maintenance deductions could make old houses less attractive, potentially leading to partial postponement of maintenance.
The planned abolition of the Eigenmietwert is likely to reduce the tax burden on homeowners of older properties, potentially increasing their willingness to keep or buy such properties. This could slow rental price increases; however, financing conditions may tighten because banks could lose interest from mortgage loans, possibly affecting mortgage availability and terms. The interplay between these factors will influence old property rental prices, considering demand and financing constraints.
Meanwhile, new construction will tend to be more expensive due to the tax relief partially flowing into more expensive objects. Migration and persistently low interest rates are creating a constant supply shortage, leading more tenants to want to become owners. The property market has been experiencing consistent house price increases, independent of the imputed rent tax or its possible abolition.
The second proposal is about whether cantons may levy a special tax on second homes. A constitutional amendment is necessary for this second proposal to become law.
Support for the first proposal is high among the centrists, while the political left opposes the project. The latest polls indicate a 'yes' to the reform, with around 60% support. About a third reject the proposal, and the rest are still undecided.
Interestingly, immigration is also a hot topic in Switzerland, with a popular initiative aiming to limit the Swiss resident population to under ten million people. The wind is becoming harsher for immigration, which is considered crucial for the real estate market, along with significantly increasing interest rates.
Subscription for the magazine "Seniorenhaushalt" is available for free, providing readers with valuable insights into these and other relevant issues. Stay tuned for updates on this significant vote and its potential impact on the Swiss real estate market.
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