Deducting rent from taxes: a comprehensive overview for tenants
Sooner or later, anyone who lives in Switzerland in rented accommodation will ask themselves the question: Can I deduct my rent from my taxes? This question is by no means trivial, because the federal tax system in Switzerland gives rise to many cantonal differences and regulations. As a tenant, you naturally want to know whether and in which cases tax relief is possible through rental cost deductions.
At the same time, the topic of renting and taxes is rife with terms and questions that, at first glance, tend to be associated with property owners or landlords – such as how exactly you pay tax on rental income in Switzerland or whether renting out your property is generally worthwhile. Nevertheless, such points also affect tenants, for example in the case of subletting or second jobs.
In this article, we will explain the most important basics that tenants in Switzerland should know about taxes and rent. We will shed light on the situations in which a rent deduction can actually be possible, how to go about it and why the Swiss tax system, with its multiple levels (federal, cantonal, municipal), hardly allows for any generalisations. You will also learn about subletting and why thorough documentation is essential when it comes to taxes.
To understand why the question of a rent deduction cannot be answered in a standardised way, it is worth taking a look at the Swiss tax system. In Switzerland, taxes are levied at three levels:
1. Federal government
Direct federal tax is levied based on guidelines and the Tax Harmonisation Act. Nevertheless, the cantons have a great deal of leeway.
2. Cantons
Each of the 26 cantons has its own tax authority. Tax rates and deductions therefore vary from canton to canton.
3. Municipalities
In addition, municipalities levy their own taxes and determine their tax rate. This means that even within a canton, different tax burdens can arise.
For tenants, this means that there is no general answer such as ‘rent is always deductible’ or ‘rent is never deductible’. In some cantons, it is easier to claim a home office than in others. Other cantons have strict rules for job-related second homes.
In principle, rental costs for your own home are considered part of your private living expenses. In other words, if you simply rent your main residence, you cannot deduct these expenses in full in your tax return. However, there are exceptions.
With the trend towards working from home, the home office is coming into focus. In some cantons, you can claim a portion of your rental costs if:
you have a separate room that is used (almost) exclusively for work.
your employer does not provide a suitable workplace or it is absolutely necessary for you to work at home (e.g. because your job is very specialised).
you can provide evidence of the room's professional use (e.g. a confirmation from your employer).
Often, a percentage of the living space is accepted as a deduction. However, whether this is recognised depends heavily on cantonal regulations and your records.
If you have to commute an unreasonably long distance and rent a second apartment or a room near your workplace, you can claim these expenses in some cases. However, strict criteria apply:
The distance to your place of work is so great that daily commuting is unreasonable.
The costs may not be deducted twice.
You must prove that the second home is really work-related.
In rare cases, some cantons allow deductions for family or health reasons – e.g. single parents who have to rent an additional apartment for their child near the school. However, these exceptions are narrowly defined and require solid evidence.
There are myths surrounding the topic of rent deductions. Many believe, for example, that occasional work at home is enough to deduct the full rent. This is not true: in most cantons, a deduction is only granted if working from home is unavoidable. Another misconception is that even small part-time jobs at home would justify having a separate study. However, it is usually argued that a small part-time job can take place in the normal living area without the need for a separate room.
The term sounds primarily like a landlord issue, but tenants can also have rental income, for example in the case of subletting:
You rent a large apartment and rent a room to a third party.
You are the main tenant and sign the rental contract with the owner, then you allocate subtenants.
This income is relevant for tax purposes and must be declared in your tax return if it is regular or exceeds the cost of living.
If you sublet, you can pass on additional costs (heating, water, house maintenance, etc.) on a pro-rata basis. Be careful not to charge more than you pay yourself, otherwise you will make a profit that must be declared.
Many tenants today have a second job or work part-time on a self-employed basis. Any non-salaried income is relevant for tax purposes. For example, do you work as a freelance graphic designer in your living room? If so, you should declare this income.
A separate study can be tax deductible if it is used almost exclusively for work and you can provide evidence of this.
Particularly in the case of mixed forms (partly employed, partly self-employed), it is advisable to seek advice from the tax office or experts in order to explore the chances of deductions.
This question is often aimed at property owners. However, it can also be relevant for tenants who are considering subletting rooms in their rented apartment. This generates income and you become a ‘landlord’ so to speak. The following should be noted:
1. Approval of the landlord: although subletting is possible in most cases, it usually requires the approval of the landlord.
2. Tax registration: regular income must be declared.
3. Settlement of additional costs: proceed correctly to avoid an unwanted profit.
4. Expenses vs. income: additional income increases taxable income (progression), which can reduce net profit.
Regardless of whether you want to deduct a study, have a second home or earn income from subletting: it is worth bearing the following points in mind:
1. Gather receipts: rental contract, utility bills, sublease agreement if applicable, and payment receipts.
2. Meet deadlines: depending on the canton, the deadline for filing your tax return is usually the end of March or June (with an extension available).
3. Provide correct information: Unjustified deductions can lead to additional claims or fines.
4. Option to appeal: If there are any discrepancies, you generally have 30 days to appeal against the tax assessment.
The so-called imputed rental value mainly affects owners, but it can also indirectly influence the discussion about rent deductions. Owners have to pay tax on the notional rental value of their own property. Some say that this puts owners at a tax disadvantage. Others argue that tenants are not able to deduct their rent either. Whether the imputed rental value should be reformed or abolished is a regular subject of political debate. The question often arises as to whether tenants should, in return, receive a general deduction of their rental costs. However, there is currently no nationwide regulation that guarantees all tenants this advantage.
Find out which rules apply in your canton. Tax offices often provide information leaflets or can be contacted by phone.
Copies of the rental contract, utility bills, and evidence of a home office (e.g. sketches, confirmation from employer) should be kept to hand.
If you claim 30% of your rent for your home office, you must be able to provide plausible evidence for this.
Additional income from subletting or second jobs will raise your taxable income, which may increase your tax rate.
In tricky cases (border cantons, multiple jobs), a fiduciary or tax consultant can provide clarity.
A comprehensive allowance to deduct rental costs is repeatedly discussed. Pro arguments include the high rental rate in Switzerland and possible financial relief for tenants. On the other hand, there are concerns about tax shortfalls and increased auditing work for the tax authorities. Since homeowners already pay tax on the imputed rental value, some argue that a general rental deduction could disturb the balance or – depending on your point of view – only establish it. So far, however, there has been no nationwide reform in Switzerland. As a result, tenants are usually only able to deduct rental costs for tax purposes in exceptional cases.
In short: if you use your own home as the main tenant, you can only claim the rent as a tax deduction in certain exceptional cases. These include:
A professionally necessary study that is used primarily for work.
A second home if daily commuting is unreasonable.
Special family circumstances (in rare individual cases).
Even tenants who sublet rooms need to be careful: as soon as you make a profit or charge higher utility costs, you may incur taxable income. In this context, the question also arises: ‘Is renting out worthwhile from a tax perspective?’ – The answer depends on the respective rental situation, your income, your canton and the progression:
1. Check the rules in your canton: Find out in good time whether rental costs are deductible.
2. Documentation is essential: Keep records of evidence for your home office or subtenancy agreements.
3. Keep an eye on progression: Additional income can increase your tax rate.
4. Monitor political developments: Changes to the imputed rental value or new rental deductions are possible, but have not yet been implemented across the board.
As more and more people are working from home or living arrangements are changing (e.g. shared living, flexible work models), the topic of rent deduction could become more important in the future. It is conceivable that political discussions around the rental value could lead to new regulations – both in favour of owners and tenants.
Helpful sources:
Websites of the cantonal tax authorities (information sheets, FAQs)
Federal Office for Housing (BWO) for general housing issues
Parliamentary procedural requests on the website of the Federal Assembly
Even if most tenants have to pay their regular rent as private living expenses themselves and often do not receive a deduction, it is worth taking a look at your own circumstances. Working from home, a (temporary) second home or subletting can be relevant for tax purposes. With proper documentation and clarification at the cantonal level, you can make the most of your options and avoid providing incorrect information.
If you want a differentiated answer to the question of whether you can deduct rent from your taxes, there is no way around checking the current legal situation in your canton of residence. Basically, the short answer for most tenants is: ‘No.’ But thanks to the special cases mentioned and an evolving legal situation, the final word remains open. If you feel unsure, consult a specialist (e.g. a tax advisor). This will ensure that you meet all legal requirements and don't miss out on any deductions. If you are the main tenant and you sublet, you should also realistically calculate whether the resulting costs and possible higher tax rates are worthwhile.
As of January 2025. Please note that the legal basis and cantonal regulations are subject to change. If you have specific questions or are unsure about anything, please consult an expert or the relevant authority in your canton of residence.
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