A Breakthrough in the Eigenmietwert Debate: What It Means for Homeowners and prospective Buyers

The Imputed Rental Value (Eigenmietwert) is currently at the center of a historic political breakthrough in Switzerland. For decades, homeowners have been taxed on the privilege of living in their own four walls. However, with the proposed abolition on the horizon, understanding the financial delta is critical for every property owner in high-value regions like Zug.

The Low-Tax Advantage in Zug

In Canton Zug, where property values are among the highest in the world, the Eigenmietwert has a unique impact. While the tax authorities typically set this fictitious income at 60% to 70% of the potential market rent, the exceptionally low tax rates in Zug (approx. 22% marginal for HNWIs) make it a strategic location for wealth preservation even under the current system.

Data Analysis: The "Abolition" Savings

We have modeled the annual tax burden (and potential future savings) resulting solely from the Eigenmietwert for properties ranging from 1M CHF to 20M CHF in the Canton of Zug.

Fig 1: Estimated annual tax savings upon abolition of Eigenmietwert in Canton Zug. Calculations assume a marginal tax rate of 22% and a notional rent of 1.75% of market value.

#### Strategic Savings Breakdown:

• 1M CHF Property: Approx. 3,800 CHF per year.


• 5M CHF Property: Approx. 19,200 CHF per year.


• 10M CHF Property: Approx. 38,500 CHF per year.


• 20M CHF High-End Villa: A staggering 77,000 CHF in potential annual savings.

Maximizing the Transition

As Switzerland moves towards the abolition of this tax, homeowners should focus on:
1. Maintenance Timing: While Eigenmietwert is active, maintenance costs are deductible. Once abolished, these deductions may disappear.
2. Mortgage Optimization: The removal of Eigenmietwert will likely go hand-in-hand with a reduction in mortgage interest deductions.

At Lowtaxhomes, we provide the data you need to position your real estate portfolio for these seismic shifts in the Swiss tax landscape. Positioning yourself in Zug today means securing a tax-efficient lifestyle for the decades to come.

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