Standard deduction

Once a home owner, you will be subject to a few new taxes, such as the rental value or property tax.

The standard deduction (in french, “Déduction forfaitaire”) will relieve some of this new taxes, as it will be deducted from your taxable income.

What is a standard deduction ?

The standard deduction allows any owner to deduct an amount from his/her taxable income, for the maintenance of the property, without having to show any evidence (bills).

Calculating your standard deduction

If the total maintenance costs of the property are lower than the standard deduction, real estate owners will apply it. The deduction is caculated based on the rental value of the property (for main residencies and/or vacation homes) or on the actual rental income generated per year (for investment properties). There is a federal, a state (canton) and a city rate.

Exemples :

• Federal rate
  • For a property less than 10 years old : 10% of the rental value (main residencies and/or vacation homes) or of the rental income (investment properties)
  • For a proprerty built 10 years ago or more : 20% of the rental value or the rental income
• Rates vary depending on the state (canton) and the city :
  • Vaud
    • For a property less than 20 years old : 20% of the rental value (only for main residencies and/or vacation homes)
    • For a property built 20 years ago or more : 30% of the rental value
    • For a property less than 20 years old : 10% of the actual rental income (only for investment properties)
    • For a property built 20 years ago or more : 20% of the actual rental income
  • Fribourg / Neuchatel / Valais
    • For a property less than 10 years old : 10% of the rental value or the actual rental income
    • For a property built 10 years ago or more : 20% of the rental value or the actual rental income
  • Geneva
    • For a property less than 10 years old : 10% of the rental income (only for main residencies and/or vacation homes)
    • For a property built 10 years ago or more : 20% of the rental income
    • For investment properties, there is no standard deduction, only the actual maintenance costs can be deducted from the taxable income

For a new property with low real maintenance costs, it will generally make sense to apply the standard deduction. For an older one, with high actual maintenance costs, it could make sense to look at it precisely, and estimate which strategy is best to use.