Deduction for property maintenance costs now also for overall renovations
New federal court ruling allows deduction for property maintenance costs even for overall renovations
The cantons have extensive information sheets and tax books that clearly regulate which expenses in real estate are considered maintenance and can therefore be deducted from the taxable income and which are considered value-enhancing or living expenses. Until now, investments in a complete renovation could generally not be deducted from the taxable income. In particular, a complete renovation was considered to have been carried out if the house was partially demolished and rebuilt. In the Federal Court ruling 9C 677/2021 of 23.2.2023, the costs of a complete renovation of a farmhouse, which was considered a protected historical building, were now accepted.
When assessing deductions for renovations of properties in the tax return, this Federal Court decision will have to be taken into account by the cantons in the future. The extent to which costs of total renovations can be deducted will depend in particular on an overall assessment. It is important to document well with pictures and planning documents which modifications have been made to an existing property. In connection with demolition costs and energy-saving renovation expenses, there are indeed other possibilities to deduct these investments from the taxable income.
In the case of larger property maintenance costs, these should be planned well for tax purposes. André Hegglin will be happy to assist you in this regard.
+41 41 226 30 56
