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Modern residential complex with several rented apartment buildings and landscaped outdoor areas.
Rented properties can provide a stable source of income – but there are various tax aspects to consider.

Taxation of rental income: legal basis

Anyone who rents out a property in Switzerland must pay the correct taxes on the rental income generated. This applies to both private and commercial landlords and irrespective of whether the property is rented out long- or short-term (e.g. via Airbnb). The tax treatment is subject to clear rules: Rental income counts as income and is subject to income tax on three levels – federal, cantonal and municipal.

The legal basis is the Federal Act on Direct Federal Tax (DBG). In addition, the relevant cantonal tax laws apply, which may differ in some details. Important: You are liable for tax as soon as you start receiving rental income, i.e. as soon as the money is credited to your account or is available to you. Ancillary costs that the tenant pays directly to you (e.g. for heating or water) are also taxable income.

Whether you rent out your property long term, occasionally sublet it or offer it as a vacation home, the basic tax rules are the same for all landlords. By familiarizing yourself with the legal situation at an early stage, you can avoid mistakes and fill out your tax return correctly.

Which taxes apply to rental properties?

If you rent out a property in Switzerland, you need to keep various tax types in mind. The most important ones for landlords are:

  • Income tax on rental income: Rental income is taxed as income. It must be declared as income from immovable property in your tax declaration.
  • Wealth tax on the taxable value of the property: In addition to recurring income, assets, i.e. the taxable value of the property, are also taxed annually. The taxable value is determined by the competent authority and may vary from canton to canton.
  • Property tax: Some cantons and municipalities also levy a property tax on the ownership of real estate. However, this tax does not apply in all cantons – for example, it does not apply in Zurich, Schwyz, Glarus, Zug, Solothurn, Basel-Landschaft or Aargau.
  • Property gains tax: If you sell your property at a profit, capital gains tax is payable on the profit earned. This is levied separately from current income and applies mainly in the event of a sale.

An important advantage for landlords: When renting to third parties, the taxation of so-called imputed rental value does not apply. This means you only have to pay tax on the rental income actually generated and not on a notional rental value, as is the case with owner-occupied properties.

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Which costs can landlords deduct?

In Switzerland, you can deduct various costs from your rental income and thus reduce the amount of tax payable. It’s important that these expenses are directly related to the property and its rental. Key deductible costs include:

  • Mortgage interest: Interest on a mortgage loan on the rental property is deductible in full.
  • Maintenance costs: This includes expenses for repairs, maintenance and renovations that maintain the value of the property (e.g. redecoration, plumbing repairs).
  • Insurance premiums: Premiums for building insurance and other relevant insurance are tax-deductible.
  • Property tax: If a property tax is due in your canton, this is also deductible.
  • Third-party management costs: If you outsource the management of your property to an external company or caretaker, these costs are deductible.
  • Costs of renting to a new tenant: You can also claim expenses for advertisements, agency fees or other costs in connection with finding a new tenant.
  • Energy-saving investments: Investments that help save energy or protect the environment (e.g. new windows, thermal insulation) are often tax-deductible.

Be sure to keep all receipts as proof of the costs if necessary. You can use every possible option offered in law to reduce the amount of tax you pay.

Lump-sum deduction or effective costs?

When it comes to deduction of maintenance costs, landlords in Switzerland can choose between a flat-rate deduction and deduction of the (effective) costs actually incurred. Both have their advantages and disadvantages – the best option depends on your individual situation.

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Calculation of taxable income

Once you’ve decided on a deduction method, you can calculate your taxable income. To determine the taxable income from the rental property, subtract all deductible costs from the gross rental income.

The basic formula is:

Gross rental income

– mortgage interest

– maintenance costs (lump sum or effective)

= taxable income from renting

For example:

Let’s say you earn CHF 24,000 gross rental income per year. The mortgage interest is CHF 6,000 and you claim a lump-sum deduction for maintenance costs of CHF 4,800 (20 percent of CHF 24,000).

CHF 24,000 (rental income)

– CHF 6,000 (mortgage interest)

– CHF 4,800 (maintenance costs, lump sum)

= CHF 13,200 taxable income

You must declare this taxable income in your tax return. Depending on the canton and your individual situation, other deductions, such as administrative costs or insurance premiums, may also be possible. Also note the limits on deductible debt interest.

Real estate in the list of assets

  • Every rented or owner-occupied property must be listed in the list of assets in the tax return.
  • The official tax value of the property as well as any mortgage debts should be stated here.
  • The taxable value is determined by the tax authority and is usually below the current market value.
  • Mortgage debt is deducted from the taxable value and thus reduces your taxable assets.
  • Real estate abroad must also be declared in the list of assets.

This information is important to ensure that your assets are correctly recorded and taxed.

Recording rental income in your tax return

Landlords must correctly declare their rental income in their tax return. The property itself is listed in the list of assets (property register) with the tax value and mortgage debts. You enter the gross rental income as well as the deductible costs (e.g. maintenance, mortgage interest, administrative costs) in the “Income from immovable property” section.

If you own a property outside your canton of residence, you must file a separate tax return for this property in the relevant canton. This applies regardless of whether you rent the property out full-time or part-time.

Make sure you comply with all the relevant deadlines and keep all receipts. This way, you will be on the safe side in the event of queries from the tax authorities and can easily provide proof of your deductions.

Special tax situations

Not every rental situation is the same. There are some special cases, in which particular tax laws apply. Here are the most important examples:

Tax-saving tips for landlords

With careful planning, landlords can optimize the amount of tax they pay. Here are some practical tips:

  • Minor maintenance work can all be completed in the same year so as to take advantage of the effective deduction. In years where not much work is carried out, a lump-sum deduction can be more advantageous.
  • Major renovations should – if possible – be spread over several tax years. You will then benefit from high deductions across several years and avoid losing part of the costs.
  • Energy-saving investments such as new windows or better insulation are particularly favorable from a tax perspective. These measures pay off in two ways: You save on taxes and reduce operating costs in the long term.
  • Keep a careful record of all receipts and invoices. This is the only way you can provide proof of your deductions in the event of an audit by the tax authorities.
  • In the case of complex situations or if you are not sure about something, it’s advisable to consult a tax advisor. This ensures you make the most of all the possibilities and don’t make any mistakes.

With these tips, you as a landlord can save on taxes and make your real estate investment even more profitable.

Good to know

The change to the system for taxing residential property was approved in the popular vote of 28 September 2025. Landlords who have to pay tax on rental and lease income from their rental properties can continue to claim the associated maintenance costs, but interest on debt can only be claimed according to the proportion of the rented or leased properties as a share of total assets. The exact date on which the new rules come into force is still to be determined. Until then, the regulations described in the article regarding tax deductions apply.

Frequently asked questions for landlords

Here you can find answers to frequently asked questions about taxation of rental income.

Conclusion: If you pay tax on rental income correctly and take advantage of all deductions, you can save on taxes and stay on the right side of the law.

If you rent out a property in Switzerland, you should familiarize yourself with the tax rules at an early stage. Rental income must be correctly declared as income – this protects you against having to make unpleasant retroactive payments or even penalties. With careful planning and the intelligent use of all permissible deductions such as mortgage interest, maintenance costs or energy-saving investments, landlords can significantly reduce the amount of tax due.

It’s important to pay attention to the differences between cantons: Many details – such as the amount of the lump-sum deduction or the handling of special cases – vary from canton to canton. It is therefore worth studying the guidelines of the responsible tax office carefully or seeking professional advice if you are unsure.

Another point: The reform of imputed rental value, which was adopted on 28 September 2025, is expected to bring changes to the taxation of owner-occupied and rented residential property. Check in good time what impact the new rules will have on your personal tax situation once they come into force.

With the right knowledge and good preparation, you as a landlord can maximize the income from your property – and stay on the safe side when it comes to taxes.

Good to know

Disclaimer

This publication is for personal information purposes only within Switzerland and is not to be understood as a recommendation, offer or solicitation of an offer for investment or other specific products and services. It is not intended to form investment, legal or tax advice and should not be used as the basis for financial decisions. Before making a decision, you should obtain professional advice.
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