On 28 September 2025, the Swiss people and the cantons will decide on a constitutional amendment that would authorise the cantons to levy a special property tax on predominantly owner-occupied secondary residences such as holiday homes. This amendment constitutes a prerequisite for the comprehensive reform of home ownership taxation, which also includes the abolition of the deemed rental value.

Under the reform, both the deemed rental value and the deductions for debt interest and maintenance expenses will be abolished. For first-time buyers of owner-occupied residential property, a temporary deduction for debt interest will remain in place. The objective is to simplify the system and reduce incentives for high indebtedness.

What does this mean in practice? At low interest rates, many property owners are likely to benefit fiscally, particularly those with limited debt. If interest rates rise, however, the tax burden may increase. Each case will depend on its specific circumstances.

The relief or additional burden will directly affect public revenue. At a mortgage interest rate of approximately 1.5%, the shortfall in revenue is estimated at around CHF 1.8 billion. If the rate rises to approximately 3%, additional revenue is expected.

In particular, cantons with a strong tourism sector could offset potential revenue shortfalls in the future through the newly introduced property tax. The full communication of the Federal Council can be found here.