Renovate or sell? The sums for your house

Three figures belong on the table before you decide. First, the renovation's real cost. Get quotes from tradespeople, not a flat figure off the internet. Second, the house's value today, and its value after the renovation. Have both assessed independently. Third, what a sale would bring net, after tax and mortgage.

A fourth figure often gets overlooked: the running costs of staying, without a major renovation. In their affordability check, banks allow roughly 1 per cent of the value a year for upkeep and running costs.¹ That is a guide figure, not a quote. For a house worth CHF 1.2 million, it would be CHF 12,000 a year.

What this means for you: a renovation does not pay off just because the house is old. It pays off when the figures afterwards beat today's, and beat a sale. The next sections show both sides of this sum.

From 1 January 2029, the imputed rental value (Eigenmietwert), the notional rent you declare today for your own home, falls away. With it goes the deduction for maintaining a home you live in. This applies at federal, cantonal and municipal level. The Federal Council fixed this date on 1 April 2026.²

For a renovation, value-maintaining costs, such as a new coat of render, stay deductible from income tax only until the 2028 tax year.² What counts is the invoice due date or the payment date, depending on the method you have used so far.³ Deductions for energy saving and environmental protection also end at federal level.⁴ Zurich's cantonal government currently calls keeping a cantonal deduction «not appropriate». There is no draft law on it yet.⁵ At federal level, the deduction for heritage conservation remains, for any home, let or not.⁴

What this means for you: planned maintenance or energy work pays off more for tax by the end of 2028. For a let property, the maintenance deduction remains.²

The tax office distinguishes two kinds of cost. Value-maintaining spending (werterhaltend) keeps the existing condition and recurs after a while, such as a new boiler. It is deductible from income tax today.³ Value-adding spending (wertvermehrend) lifts the house permanently to a better standard. It does not count as maintenance for income tax.³ The exception today: energy saving and environmental protection are deductible even when value-adding, as far as no subsidies cover them.³

This is exactly where the lever sits: value-adding costs count as acquisition costs (Anlagekosten) for property gains tax when you later sell the house.³ A new lift counts as fully value-adding in Zurich's classification catalogue. When a bathroom is modernised, two-thirds usually count as deductible maintenance and the rest as value-adding.³ These are guide values, not a fixed rule.³

What this means for you: keep every quote and every invoice. The value-adding part lowers the taxable gain on a later sale. The tax office wants precise details of the work and the condition, before and after.³

A lift or a new layout is a structural change. In the Canton of Zurich, a building permit is required for erecting, altering and using buildings.⁶ Pure upkeep and smaller interior changes of minor significance are exempt.⁶ Whether a level-access shower or wider doors fall under this, your municipality's building office will tell you. It is the first point of contact.⁶

Before planning, professional advice is worth getting, whether or not you sell. The Swiss Centre for Accessible Building keeps a list of advice centres.⁷ In the Canton of Zurich, Pro Infirmis refers to the building advice service of the Behindertenkonferenz Kanton Zürich.⁸ It is open to professionals and to those affected.⁸

What this means for you: renovating for later life pays off more when the location and size still suit you. It also helps if no large backlog of repairs falls due at the same time. The alternative: put the proceeds of a sale towards a flat that already suits later life, instead of retrofitting.

First, subsidies. The Canton of Zurich supports, for example, replacing a fossil-fuel heating system with a heat pump, or insulating the roof and walls.^{9 10} The application must be complete before work starts. Once work has begun, no support is possible.¹⁰ Many heat pumps and solar installations only need a notification to the municipality. In historic core zones and areas covered by a townscape or heritage inventory, a permit is still required.¹¹

Second, asbestos. In houses built before 1990, asbestos-containing materials are to be expected. The Federal Office of Public Health advises checking this at the latest before awarding contracts. It is not unusual to need a specialist removal firm.¹²

Third, financing. If a larger mortgage is to pay for the work, the bank checks affordability against your pensions. It calculates with 5 per cent interest, not today's rate.¹³ Depending on the bank, housing costs may take 33 to 38 per cent of your pensions.^{13 14} What this means for you: settle all three points before you sign a contract.