Real estate guide
Buy-to-let properties: the fundamentals
How yield figures are calculated, how the capitalised earnings value works and which financing rules apply to rented properties — pure mechanics, without an investment judgement. With official sources.
Last updated on September 8, 2026 · Reviewed by our FINMA-licensed advisory team
In brief
Buy-to-let properties are real estate held for yield purposes and rented to third parties — typically apartment buildings. Their key figures follow market conventions: the gross yield sets the target rental income against the purchase price; the net yield first deducts the operating costs. Buy-to-let properties are appraised at their capitalised earnings value — the capitalised, sustainably achievable net rental income (the banks' FINMA-recognised valuation guidelines).
For financing, the same basic rules as for owner-occupied homes have formally applied since 2025 (10 percent hard equity, amortisation to two-thirds within 15 years) — the former special tightening has been repealed. The treatment nevertheless remains stricter: through higher risk weights under the Capital Adequacy Ordinance at every loan-to-value level, and through affordability measured against the property's earnings, not personal income.
This page explains terms and rules — it is not investment advice, not a recommendation to acquire real estate, and it deliberately contains no yield or market forecasts. As of 2026, without guarantee. Whether a specific property fits as an investment is an individual question.
What a buy-to-let property is
The FINMA-recognised mortgage-lending guidelines define buy-to-let properties as real estate held for yield purposes and rented to third parties — irrespective of the owner's legal form; typically apartment buildings, office and commercial properties or mixed-use objects. Owner-occupied objects are not included.
The Capital Adequacy Ordinance works with the same split ("owner-occupied" and "other" residential properties) and knows a practical exception: those who co-finance and rent out at most one additional dwelling unit in the home they occupy still count as owner-occupiers (CAO Art. 72 para. 3).
The key figures: gross and net yield
The customary yield figures are market and valuation conventions — they appear in no statute:
- Gross yield: target rental income per year divided by the purchase price. Does not take costs and vacancy into account.
- Net yield: rental income minus operating costs (maintenance, administration, insurance, reserves), divided by the capital invested. Includes the operating costs; the result depends on the cost assumptions.
- Vacancy: the sustainably achievable income assumes a lettable state — the vacancy rate published by the Federal Statistical Office measures empty dwellings relative to the stock and feeds into appraisals as a regional risk.
This page deliberately names no example percentages and no target yields: what values a specific property achieves depends on the object, location, costs and financing — and is not a question that can be answered in general terms.
Appraisal: the capitalised earnings principle
For the lending value of buy-to-let properties, the FINMA-recognised mortgage-lending guidelines prescribe the CAPITALISED EARNINGS VALUE: the capitalised, sustainably achievable rental income — calculated on net rents, excluding ancillary costs (section 4.5 and the glossary of the guidelines).
The capitalisation rate is usually composed of a base rate, supplements for operating costs (ongoing maintenance, administration, charges, insurance premiums, taxes) and replacement investments, plus risk supplements reflecting among other things use, condition, location and the regional vacancy rate. The rulebook deliberately names no concrete percentages — they are set internally by each bank. Expectations of future value gains must not flow into the appraisal (section 4.1).
Financing: same basic rules, stricter mechanics
The special tightening for buy-to-let properties from the 2020 self-regulation — 25 percent equity and amortisation to two-thirds within 10 years — was repealed with the revision of 1 January 2025 (documented also by the Swiss National Bank). Since then, the general SBA rules formally apply: at least 10 percent equity not stemming from the 2nd pillar, and amortisation to two-thirds of the lending value within at most 15 years.
The treatment remains stricter through two mechanisms:
| Loan-to-value | Owner-occupied | Rented (other) |
|---|---|---|
| up to 50% | 20% | 30% |
| over 50–60% | 25% | 35% |
| over 60–70% | 35% | 55% |
| over 70–80% | 35% | 60% |
| over 80–90% | 45% | 75% |
| over 90–100% | 55% | 85% |
If the basic requirements (equity, amortisation, affordability check) are not met, a flat risk weight of 150 percent applies to rented residential properties (CAO Art. 72c para. 5). And affordability for a buy-to-let property is measured against the OBJECT'S EARNINGS: net rents minus object costs, financing costs and amortisation — not against personal income (mortgage-lending guidelines section 3.3 and glossary).
Taxes and official context
Rental income is taxable as income (DBG Art. 21); maintenance, restoration, insurance and administration costs of rented properties are deductible — and expressly remain so after the 2029 system change (new DBG Art. 32a).
This page does not comment on the market itself; as official context, the Swiss National Bank's assessment may be quoted: the Financial Stability Report 2026 classifies the affordability risks in the residential buy-to-let segment as elevated. What that means for a specific object is a matter of individual examination.
The regulatory levels of property financing: the financing guide →
How a specific property would be appraised and financed is individual — we are happy to discuss your situation, with no obligation.
Frequently asked questions
How do you calculate the yield of a property?
By market convention in two stages: the gross yield divides the annual target rental income by the purchase price; the net yield first deducts the operating costs from the income and divides by the capital invested. Both are conventions, not statutory formulas — and what values an object achieves is a case-by-case question (source: market practice; cost categories per the SBA mortgage-lending guidelines).
How is an apartment building appraised?
Under the capitalised earnings principle: the sustainably achievable net rental income (excluding ancillary costs) is capitalised with a rate reflecting the base rate, operating costs, replacement investments and risk supplements (among other things for the regional vacancy rate). This is what the FINMA-recognised mortgage-lending guidelines require for the lending value; concrete rates are set internally by each bank (source: SBA mortgage-lending guidelines section 4.5).
How much equity does a buy-to-let property require?
The former special rule (25 percent) was repealed as of 1 January 2025 — formally, the general 10 percent hard equity and the 15-year amortisation to two-thirds apply. In practice, banks often require more because of the higher CAO risk weights and object-earnings affordability; that is bank-specific (source: SBA minimum requirements, CAO Annex 3, SNB).
How is affordability checked for buy-to-let properties?
Against the object, not the person: decisive is the object's earnings — net rents minus object costs, financing costs and amortisation (glossary of the FINMA-recognised mortgage-lending guidelines). The imputed parameters are set internally by each bank (source: SBA mortgage-lending guidelines section 3.3).
Does a rented granny flat already count as buy-to-let?
No — the Capital Adequacy Ordinance still treats a self-occupied object with at most one additional, co-financed and rented dwelling unit as owner-occupied (CAO Art. 72 para. 3). Only beyond that do the rules for other residential properties apply (source: CAO).
How is rental income taxed?
As income from immovable property (DBG Art. 21); maintenance, restoration, insurance premiums and third-party administration are deductible. These deductions remain in place for rented properties after the 2029 tax system change as well (source: DBG Art. 32, from 2029 Art. 32a per BBl 2025 23).
Sources
- SBA — Guidelines on the review, valuation and settlement of mortgage-secured loans (earnings value, object earnings, glossary; version of December 2023)
- SBA — Guidelines on minimum requirements for mortgage financing (version of December 2023, in force since 1.1.2025)
- Fedlex — CAO Art. 72, 72c and Annex 3 (definitions, risk weights, fallback; as of 1.1.2025)
- SNB — Financial Stability Report 2026 (repealed buy-to-let tightening; risk assessment)
- Fedlex — DBG Art. 21 and 32 (rental income, deductions; current law)
- Fedlex — Federal act on the system change in home-ownership taxation (new DBG Art. 32a: deductions for rented properties)
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.
More guides on this topic
- Financing a home in Switzerland: the complete guide →The complete guide
- Abolition of the imputed rental value: what applies from 2029 →
- Buying a home in Switzerland: the process step by step →
- Selling a home: process, brokers and the capital gains tax →
- Renovation and taxes: what applies until 2028 — and from 2029 →
Advice
Questions about a specific property?
Appraisal, financing and classification of a specific property are individual. We are happy to discuss your situation — with no obligation.