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The bank has done its sums. A figure appears on the screen, without a viewing, without a word about your house itself. Perhaps it matches what you expected. Perhaps not – then one question remains: how does a computer know what my house is worth? It was never here. This page shows what stands behind that figure. Where it comes from, how accurate it really is – and for which houses it reaches its limits.
How accurate is this figure really?
| Figure | Value | What it means |
|---|---|---|
| Explanatory power (R²) | 0.813 single-family house · 0.857 flat | How well the official model statistically explains the price |
| Deviation under 25 per cent | just under four in five properties | How often the model estimate was close to the actual sale price |
| Tax value, Canton of Zurich | 70 to 100 per cent of market value | Own formula (land value + time-adjusted building value), range set by canton |
| Age deduction (Zurich building value) | 1 per cent a year, 40 per cent at most | New from tax period 2026, previously 30 per cent at most |
How does a hedonic valuation of a property work?
A hedonic valuation treats your house as a bundle of individual features. The name comes from the Greek hēdonē (pleasure, enjoyment); it refers to the benefit of individual features. Features include size, age, condition and location, even access to public transport or a lake view.1 Each feature moves the price up or down, on average. How much is hard to observe directly. A regression – a statistical method – estimates it from tens of thousands of actual sales.1
The Federal Statistical Office uses this approach for its official property price index. It groups properties by type and municipality.1 Its model for single-family houses counts 78 features, from plot size to the view of a lake or mountains.1
Purchase and sale prices are not officially disclosed in Switzerland. The Federal Statistical Office therefore collects its data directly from the largest mortgage lenders.1
What this means for you: an online valuation or bank estimate does not come from a viewing of your house. It comes from a calculated comparison with many similar sales.
Your own valuation with net figures goes further than a model figure: with a viewing, comparable properties, and what is left for you after tax and costs.
Prefer to talk? +41 76 325 11 95 – you speak directly with Dominik Devaja.
How accurate is a hedonic estimate really?
In the official FSO model, the price estimate is within 25 per cent of the sale price for just under four in five properties.1 Among the rest, a very high sale price appears more often. The model tends to underestimate these.1 This figure applies only to the official index model, built mainly for the average quality of a price index. It does not aim to value individual houses.1
One large Swiss provider states its own figure. It states this can deviate by up to 20 per cent from the market value.3 That is a provider claim, not an official measurement. Both figures belong side by side, not against each other.
The method reaches its limits when too few comparable sales exist. Typical cases are listed heritage houses, luxury homes or very large plots.3 A financial advisory firm also names a large garden, lake frontage and farmland zoning as limits.4
What this means for you: such a house needs an individual assessment, not just a model figure.
What is the difference between market value, lending value and tax value?
Three figures are often confused. The market value, also called the fair value, is the price a buyer would pay within a year under normal conditions.2 The bank uses this value for owner-occupied homes.2
The lending value is different: it is what the bank uses to calculate your mortgage.2 When buying, the lower of the estimate and the purchase price counts. Pay more than the bank’s market value, and it lends against the lower figure. For a family preferential-price sale, the bank may deviate.2
The tax value is a third figure: it is what the canton sets for wealth tax.5 It must, under the canton’s legal rules, lie between 70 and 100 per cent of the market value.5 It uses the land value and a time-adjusted building value.
What this means for you: the tax value is not a sale price. Property gains tax is calculated on the profit, not the tax value – the property gains tax calculator shows the amount. Your tax office confirms the exact figure.
To be honest
When is a model figure not enough?
For standard properties, the hedonic method is well documented: the Federal Statistical Office openly publishes model quality and error rate.1 For listed heritage houses, luxury homes, very large plots, direct lake frontage or land in an agricultural zone, UBS and VZ see the method reaching its limits34.
For a single house, providers at most give a rough order of magnitude, such as «up to 20 per cent»3. There is no official measurement for individual properties.
For daughters and sons
Researching this for your parents?
Often it is you who fills in an online valuation for your parents. The figure arrives quickly – the explanation rarely does. Show your parents first where it comes from and where it reaches its limits, before anyone relies on it. That way, you stay the daughter or son who helps them understand, not the one who decides.
Further reading
What else helps after the model figure?
- Property valuation with net calculationWhat is my home worth – and what is left after tax and costs?
- Estate agents in Zurich: four models comparedFixed fee, commission, platform or success share – which agent model leaves me the most, net?
- How we sellHow does a sale with Immosmile work – from the first conversation to the notary?
What else do owners ask?
What is a hedonic valuation?
A method that calculates, from tens of thousands of real sales, how strongly individual features such as size, age or location change the price. The name comes from the Greek hēdonē (pleasure, enjoyment); it refers to the benefit of individual features.
Who develops and uses hedonic models in Switzerland?
The Federal Statistical Office, for its official price index, plus banks and specialised providers for their own estimates and mortgages.
Is the tax value the same as the market value?
No. In the Canton of Zurich, the tax value must, under the canton’s legal rules, lie between 70 and 100 per cent of the market value5 and is calculated with its own formula. Your tax office confirms the exact figure.
Which houses are hard to assess with the hedonic method?
Houses with too few comparable sales: listed heritage houses, luxury homes, very large plots or direct lake frontage.
Is an online estimate enough to sell?
As a first orientation, yes. As a sale price, no. For that, you need a viewing and the valuation with net figures.
What does the valuation with net figures cost?
Nothing. The valuation is free and without obligation, even if you decide not to sell in the end.
Sources
- Federal Statistical Office (FSO): methodology report on the quality-adjustment procedure for the residential property price index, in German · Neuchâtel 2020, retrieved 08.10.2026
- Swiss Bankers Association: guidelines on the review, valuation and processing of mortgage-backed loans, in German · version of 13.12.2023, in force since 1.1.2025
- UBS: Hedonic estimation, in German · 07.06.2024, retrieved 08.10.2026
- VZ VermögensZentrum: When is the hedonic method applied?, in German · retrieved 08.10.2026
- Canton of Zurich: property revaluation 2026, in German · retrieved 08.10.2026
General information without guarantee, not individual advice. The law, the tax assessment and advice from professionals for your situation are what count. Terms of use