In Switzerland, property owners can benefit from various tax deductions. To take full advantage of these tax benefits, it is important to distinguish between deductible and non-deductible expenses. This distinction will help you optimize your tax situation while complying with applicable regulations.
Deductible property expenses aimed at maintaining the value of the property
The government encourages property owners to maintain their real estate to preserve the value of existing buildings and prevent the degradation of Switzerland's housing stock. This benefits the community and preserves the value of the country's real estate heritage. Here are some examples of deductible expenses:
- Expenses related to repairs or renovations that do not increase the property's value.
- Contributions to a repair or renovation fund (Art. 712l CC) for condominium properties, specifically for the maintenance of shared facilities (under certain conditions).
- Operating costs (e.g., waste management fees (with specific conditions), wastewater treatment, road maintenance, property taxes, costs for the maintenance and operation of elevators, etc.).
- Insurance premiums for property coverage (e.g., fire, water damage, glass breakage, liability insurance, but excluding private civil liability insurance).
- Administrative costs for rented properties (e.g., property management fees).
- Costs aimed at saving energy and protecting the environment (e.g., photovoltaic panels, building insulation, energy-efficient windows, heating systems other than fossil fuels, etc.).
In addition to these items, do not forget:
- Mortgage interest (interest due for financing granted when purchasing your property).
Note: Amortization used to reduce your mortgage loan, unfortunately, is not deductible.
Non-deductible property expenses
Non-deductible property expenses include costs that do not pertain to maintenance or preserving the existing property, such as:
- Acquisition costs of the property (e.g., notary and registration fees, transfer taxes, real estate agency commission related to the purchase).
- Costs related to furnishing or decorative elements.
- "Luxury" renovations (e.g., aesthetic or luxury projects such as installing a swimming pool, spa, veranda, or wine cellar).
Optimizing your tax situation
To optimize your taxes, it is essential to understand the difference between eligible and non-eligible expenses. It is also wise, when necessary, to plan and spread maintenance work over several years to maximize annual tax deductions.
Do not hesitate to consult with a professional who can assist you and tailor advice to your specific situation.