The Eigenmietwert is the imputed rental value of owner-occupied properties in Switzerland. It is treated as notional income and used to calculate income tax. This value represents the amount an owner would earn if they rented out their property to a third party, and it must be reported as income on the tax return. The calculation and exact amount of the Eigenmietwert vary by canton.

Applicability

• The Eigenmietwert applies to owner-occupied and vacant properties.
• It does not apply to properties that are rented out or used solely for commercial purposes.

Taxation of Holiday Homes
Different rules apply to holiday homes. Here’s how it works:

1. For Rented Periods: The actual rental income earned during the rental period must be taxed. For example, if a holiday home is rented out for 7 months, the rental income for those 7 months is taxable.
2. For Vacant Periods: The tax office often calculates a deemed rental value for the remaining months, arguing that the property was available for personal use. However:
   – If you can prove you attempted to rent the property but were unsuccessful, the deemed rental value for the vacancy period is not taxed.
   – Evidence of rental efforts, such as advertisements and correspondence, must be provided.

Why Is Eigenmietwert Taxed?
Although Eigenmietwert is not an actual income, it is taxed as part of Switzerland’s solidarity-based tax system. Here’s why:

• “In-Kind Income”: Living in your own property generates a benefit similar to the rent you would earn by renting it out. While no cash is received, living rent-free is seen as a form of economic advantage or saving.
• Tax Equality: Homeowners can claim deductions, such as mortgage interest and maintenance expenses, which tenants cannot. Taxing Eigenmietwert ensures balance between the two groups.

The taxable value typically amounts to 60–70% of the annual rental value the property could generate.

Historical Background
The Eigenmietwert has its origins in the early 20th century:

1. 1915 – Introduction as a War Tax: It was first introduced during World War I as a one-time tax to compensate for reduced customs revenues.
2. 1934 – Reintroduction as a Crisis Levy: During the Great Depression, it was reintroduced as a federal crisis levy to stabilize the budget.
3. Post-War Transformation: Initially set to expire in 1938, it was extended several times and became a “defense tax” in 1945, designed to fund war-related expenses until fully paid off.
4. 1958 – Permanent Law: With public and cantonal approval, the tax was formally incorporated into regular law.

Current Developments
The Eigenmietwert has been a part of Swiss tax law for over a century, and once implemented, taxes in Switzerland are rarely abolished. However, there are ongoing discussions about eliminating it. The Economic Affairs and Taxation Committee (Kommission für Wirtschaft und Abgaben – WAK) of the Council of States has proposed a new system, signaling potential changes to this longstanding policy.