Mortgage & taxes: What you need to know
Mortgage interest, property maintenance costs, and imputed rental value can all have a significant impact on your taxes. The right mortgage strategy can help you save on both interest and taxes. Our partner, MoneyPark, offers free, independent advice, as well as a convenient mortgage calculator.
How your mortgage impacts your taxes
Financing a home comes with tax obligations and opportunities. Homeowners must declare the imputed rental value as income, which increases their tax burden. On the other hand, mortgage interest and maintenance costs to preserve the property’s value are tax-deductible.
Good to know: A mortgage can reduce taxable wealth since mortgage debt can be deducted from the property’s value, which lowers your wealth tax.
Save taxes with the right mortgage
The choice of mortgage — including term, interest model, and repayment strategy — has financial and tax implications. For instance, it may be wise to avoid repaying the mortgage too quickly in order to take advantage of the interest deduction over the long term. Renovations and investments should also be planned carefully because only maintenance expenses are tax-deductible, not improvements that increase the property's value.
The optimal strategy depends on your financial situation, property value, and canton of residence. For this reason, individual mortgage advice, ideally with a focus on taxes, is worthwhile.
MoneyPark: Your partner for independent mortgage advice
In partnership with MoneyPark, Switzerland’s leading mortgage broker, we offer unbiased advice on financing, interest rates, and tax optimization. Take advantage of a free initial consultation and secure the best offer from over 100 providers.
Frequently asked questions
Everything you need to know about the tax implications of your mortgage in Switzerland
Are mortgage interest payments tax-deductible in Switzerland?
Yes, mortgage interest is tax-deductible in Switzerland as debt interest. However, there is a limitation: the deduction cannot exceed the sum of your taxable investment income plus CHF 50,000.
Can I deduct mortgage amortization payments from my taxes?
No – only the interest is deductible. Mortgage repayments (amortization) cannot be claimed for tax purposes.
What is the tax difference between direct and indirect amortization?
With direct amortization, your debt and your deductible interest payments decrease over time. With indirect amortization, your mortgage remains constant while you contribute to Pillar 3a. This keeps your interest deductions unchanged and adds extra tax savings through the 3a contributions.
What other homeownership expenses are tax-deductible in Switzerland?
In addition to mortgage interest, you can deduct maintenance expenses that preserve your property's value, such as renovations, repairs, and energy-efficient investments. Depending on the canton, you can claim these expenses either as a lump sum or in full.
Why is professional mortgage advice worthwhile from a tax perspective?
A consultation will help you choose the optimal mortgage type, repayment strategy, and tax structure for your individual situation.
Do you have any questions?
Mortgages and taxes are closely connected and often complex. Our team helps you find the right solutions for your situation.