Tax saving tip 3: Plan property maintenance costs
The maintenance costs of owner-occupied or rented properties or condominiums are fully tax-deductible, which is why there are a variety of tax planning options.
You can decide each year whether you want to deduct the lump sum or the effective maintenance costs (lump-sum). However, if the maintenance costs do not exceed the lump-sum deduction (usually 10 % or 20 % of the rental income, depending on the canton and the age of the property), it is worthwhile for tax purposes to postpone maintenance work that is not urgently required to a tax year in which further maintenance work has to be carried out and thus exceeds the lump-sum.
Not just maintenance cost, but also other costs be deducted, as long as they do not add value to the property. Such other costs include insurance, administrative costs, subscription costs or payments into the renewal fund. In the case of condominium owners, the administrators sometimes prepare statements per owner. Certain cantons also allow the deduction of value-added costs for energy-saving measures. For further details, cantonal regulations should be consulted closely.
Good to know: Since 2020, energy-saving investments can be claimed for up to three tax periods for federal taxes and for some cantons, if the costs cannot be fully considered in the year in which it incurred. The new Real Estate Costs Ordinance even allows under certain circumstances the deduction of the costs for a replacement building for up to three year. This may result in the taxable income tending towards zero for three years. It may be worth waiting with the replacement of the building, since the Ordinance has not been implemented yet by the majority of cantonal legislation.
Larger renovations, can result in a negative income, which would not make sense for tax purposes. Therefore, if possible, we recommend spreading larger renovation costs over two years. Most cantons use the payment date as the cut-off date, but clarify this more precisely if the payment is made over the turn of the year.
Titania Heimerl will gladly help out for further questions:
+41 41 226 30 52