Real estate guide
Renovation and taxes: what applies until 2028 — and from 2029
Value-preserving or value-enhancing, the lump-sum deduction, energy-saving measures — the current deduction rules and the adopted system change, set out neutrally side by side. With official sources.
Last updated on September 8, 2026 · Reviewed by our FINMA-licensed advisory team
In brief
Up to and including the 2028 tax year: value-preserving maintenance on the owner-occupied home is tax-deductible — effectively or as a lump sum —, while value-enhancing investments are not; in return, they later count towards the investment costs for the real-estate capital gains tax. The distinction follows the Federal Supreme Court's formula: preserving existing values is maintenance, creating new values is enhancement.
From 1 January 2029, the adopted system change alters both at once: the maintenance deduction for owner-occupiers is abolished — and with it, the imputed rental value disappears as taxable income. For rented properties, the deductions remain. What this means for a planned renovation depends on the individual situation.
This page provides general information and does not replace personal tax advice. As of 2026, without guarantee; cantonal practices partly differ. Whether and how the rules affect a specific renovation project depends on the individual situation and belongs in personal advice.
Value-preserving or value-enhancing? The distinction
The law does not define the distinction — it follows from the interplay of the deduction rule (DBG Art. 32 para. 2) and the counter-rule (DBG Art. 34 let. d: expenses for value enhancement are not deductible), as specified by the case law: maintenance costs preserve already existing values, value-enhancing expenses create additional new values. The yardstick is the individual installation, not the property as a whole — and functionally: whatever puts the property into a better state is value-enhancing (Federal Supreme Court practice, BGer 2C_1166/2016).
Cantonal administrative practice illustrates this (example: directive of Appenzell Ausserrhoden): the contemporary, equivalent replacement of a kitchen that has become unusable is value-preserving; if the replacement brings more comfort or capacity, the added-value share — separated by estimate — is value-enhancing; conversions, additions and extensions are so entirely.
Value-enhancing is not lost
Value-enhancing investments do not vanish: they count towards the investment costs for the later real-estate capital gains tax and reduce the taxable gain (StHG Art. 12 para. 1) — as the Federal Supreme Court has expressly held. Kept receipts of value-enhancing work can be claimed in the settlement after a sale.
The rules up to and including tax year 2028
For privately held properties, the following applies until the end of 2028 (DBG Art. 32, property-costs ordinance):
- Deductible are maintenance costs, restoration costs of newly acquired properties, insurance premiums and third-party administration costs (DBG Art. 32 para. 2). The former Dumont practice has been abolished since 2010 — restoration shortly after acquisition is deductible too, but the distinction from enhancement remains.
- Instead of effective costs, a lump-sum deduction can be chosen: 10 percent of the gross rental income or imputed rental value for buildings up to 10 years old, 20 percent for older ones — the choice is made anew in each tax period and for each property (property-costs ordinance Art. 5).
- Investments in energy saving and environmental protection on existing buildings are treated as maintenance costs; subsidised shares are not deductible (DBG Art. 32 para. 2, ordinance Art. 1).
- Energy-saving and demolition costs (with a view to a replacement build) can be carried forward to the two following tax periods — but only insofar as net income becomes negative (DBG Art. 32 para. 2bis, ordinance Art. 4).
From 1 January 2029: the system change
With the adopted system change (popular vote of 28 September 2025, brought into force by the Federal Council per 1 January 2029), the renovation rules for owner-occupiers change fundamentally — in return, the imputed rental value disappears:
| Point | Up to tax year 2028 | From 1.1.2029 |
|---|---|---|
| Maintenance, owner-occupied | Deductible, effective or lump sum (10/20%) | No longer deductible — the lump-sum deduction ends as well |
| Imputed rental value | Taxable as income | Abolished |
| Energy-saving investments | Treated as maintenance, with carry-forward | No federal deduction any more; cantons may continue it for a limited time, at the longest until 2050 (StHG Art. 78h) |
| Heritage-protection work | Deductible | Remains deductible — for owner-occupiers too (new DBG Art. 32) |
| Maintenance of rented properties | Deductible | Remains deductible, incl. lump-sum deduction (new DBG Art. 32a) |
| Value-enhancing as investment costs (capital gains tax) | Creditable | Remains creditable (StHG Art. 12) |
The whole system change at a glance: abolition of the imputed rental value 2029 →
The timeline
Up to and including tax year 2028
The current law applies in full: tax the imputed rental value, deduct value-preserving maintenance effectively or as a lump sum, energy-saving investments treated as maintenance.
From 1 January 2029
System change: no imputed rental value and no maintenance deduction for owner-occupiers; the heritage-protection deduction remains, cantonal energy-saving deductions are possible for a limited time; rented properties unchanged.
Unchanged in both systems
The value-preserving/value-enhancing distinction for rented objects, and the crediting of value-enhancing investments as investment costs for the capital gains tax.
Putting it together
Until 2028 one system applies, from 2029 the other — each with its own logic: today deduction plus imputed rental value, in future neither. What this means for a planned renovation depends on the individual situation — on the property, its use, the scope and the income situation.
We are happy to put the rules into context for your situation together with you — with no obligation.
Frequently asked questions
Can I deduct renovation costs from my taxes?
Up to and including the 2028 tax year: yes, insofar as they are value-preserving — effectively or as a lump sum (10 or 20 percent of rental income/imputed rental value depending on building age). Value-enhancing shares are not deductible, but later count towards the investment costs for the capital gains tax (source: DBG Art. 32/34, property-costs ordinance, StHG Art. 12).
What is value-preserving, what is value-enhancing?
Under the Federal Supreme Court's formula: value-preserving is what preserves already existing values — such as the equivalent replacement of an unusable kitchen; value-enhancing is what creates additional new values or puts the property into a better state — such as extensions or comfort upgrades, whose added-value share is separated out. The yardstick is the individual installation (source: BGer 2C_1166/2016; cantonal administrative practice).
Are value-enhancing investments lost for tax purposes?
No — they count towards the investment costs for the later real-estate capital gains tax and reduce the taxable gain (StHG Art. 12 para. 1). Kept receipts can be claimed for this (source: StHG, Federal Supreme Court).
How does the lump-sum deduction work?
Instead of effective costs, 10 percent of the gross rental income or gross imputed rental value can be deducted (buildings up to 10 years old) or 20 percent (older buildings); the choice is made anew in each tax period and for each property (source: property-costs ordinance Art. 5). From 2029, the lump-sum deduction ends for owner-occupiers.
What applies to energy-saving measures?
Until 2028, investments in energy saving and environmental protection on existing buildings are treated as maintenance costs and can be carried forward to two following periods if needed; subsidised shares are not deductible. From 2029, the federal deduction ends; the cantons may continue it for a limited time, at the longest until 2050 (source: DBG Art. 32, StHG Art. 78h).
Can I still deduct renovations from 2029?
For owner-occupied homes no — the maintenance and the lump-sum deduction end with the system change; in return, the imputed rental value is abolished. Heritage-protection work and the maintenance of rented properties remain deductible (source: BBl 2025 23, new DBG Art. 32/32a).
Does the Dumont practice still apply?
No — it was abolished as of 1 January 2010: restoration costs shortly after acquisition are deductible too, provided they are value-preserving. The distinction from enhancement continues to be examined case by case (source: AS 2009 1515, BGer 2C_1166/2016).
What does the system change mean for a planned renovation?
Up to and including the 2028 tax year, today's system with maintenance deduction and imputed rental value applies; from 2029, the new one without either. How this affects a specific project depends on the property, its use, the scope and the individual tax situation — there is no blanket answer (source: DBG, BBl 2025 23).
Sources
- Fedlex — DBG Art. 32 and 34 (maintenance deduction, value enhancement; current law)
- Fedlex — Ordinance on property costs (SR 642.116: lump-sum deduction, energy saving, carry-forward)
- Federal Supreme Court — judgment 2C_1166/2016 of 4 October 2017 (distinction formula)
- Fedlex — StHG Art. 12 (investment costs) and Art. 78h (limited-time cantonal energy-saving deductions from 2029)
- Fedlex — Federal act on the system change in home-ownership taxation (BBl 2025 23)
- Federal Council — media release of 1 April 2026 (entry into force per 1.1.2029)
- Tax administration of Appenzell Ausserrhoden — directive on the tax treatment of property maintenance (cantonal administrative practice, examples)
Every deadline and figure on this page has been verified against the official sources linked above. As of the date shown at the top. This page does not replace individual advice.
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Advice
Planning a renovation?
How the deduction rules and the system change affect your situation is individual. We are happy to discuss it with you — with no obligation.