In Switzerland, home ownership provides ways to make tax savings. Our tax optimisation tips explain which deductions you can claim.
The official deadline for submitting your tax return is the end of March. Whether you complete your own return or entrust it to a professional, it is important to be aware of all the optimisations available to you as a homeowner.
You should always deduct the cost of work that preserves the value of your property and maintenance costs from your tax bill. This can include, for example, repainting, putting in a new roof or replacing a broken fridge. Have you bought a new build and therefore not needed to undertake any value-preserving work? For properties that are less than 10 years old, you can claim a standard deduction of 10% of the rental value. The typical figure for older properties is 20%. However, if you have undertaken major renovation work, you should always check whether the actual cost is higher than the standard deduction.
But there is a crucial proviso: any expenditure that increases the value of the property, such as a kitchen extension, is not tax-deductible. The only exception to that rule is for energy-saving improvements, where you can still claim a deduction.
Depending on which canton you live in, you may also be able to deduct buildings, property and liability insurance premiums when completing your tax return. If you own a condominium, your payments into the renovation fund are also deductible. However, as the rules vary greatly from canton to canton, you should study the guidance notes for your tax return carefully and contact your tax office directly if anything is unclear.
For owner-occupied properties, the imputed rental value of your home is added to your taxable income. This rental value is calculated from time to time and is around 60–70% of the annual amount that a hypothetical tenant would pay. In return, you can deduct 100% of your mortgage interest costs from your tax bill. However, as interest rates have been low for years now, these deductions have ceased to cover the rental value. That makes it all the more important to use all possible deductions, so that this fictitious income does not drive up your tax bill excessively.
If you want to delve deeper into the topic of tax optimisation, the free Engel & Völkers Property-related taxes guide provides more information.
Still renting but thinking this might finally be the year you buy your own place? Your dream house or flat could already be online! You can also register with your local Engel & Völkers shop so that we can add you to our list of house-hunters and let you know about new property listings before they go live online.
Give us a call or drop by and see us in person.
We look forward to hearing from you!