Sustainable Investments in Your Home: What Pays Off, and What Doesn’t.

Just as when purchasing a property, it’s advisable to consider resale value when undertaking later renovations, additions, and long-term investments. Numerous factors influence a property’s value and appeal.

Investments with Potential for Appreciation: Unlike fixed location factors and unchangeable conditions, a property’s value—and thus its resale price—can be positively influenced through coordinated measures and ongoing investments. These include high-quality interior finishes using premium and durable materials: bathrooms in a timeless, classic design featuring natural stone, ceramic, glass, etc., or a well-equipped, functional kitchen area with multifunctional appliances.

Seamless flooring made of exclusive natural stone such as marble or granite, as well as solid hardwood flooring in all rooms, enhance the property’s value and living experience. Investments in the luxury segment (e.g., swimming pool, wellness area, landscaping, alarm and security systems, smart home technology) also pay off in the long term and very often result in a significant increase in the property’s value.

Sustainable investments in the building envelope (roof renovation, triple-glazed soundproof windows, facade insulation) as well as the switch to climate-friendly heating systems (heat pumps, solar systems, or district heating) instead of oil or gas heating systems are of crucial importance in the current market environment. They reduce operating costs, increase living comfort, and positively influence prospective buyers’ decisions.

Tax Implications During the Transition Period

When it comes to the tax burden, a strict distinction must be made between investments that preserve value and those that increase value. This is currently a particularly dynamic issue: Following the approved system change to abolish the imputed rental value, the new homeownership taxation will take effect on January 1, 2029. Until the end of this transition period, the existing tax rules will apply, which opens up an important window of opportunity for homeowners:

Renovations to preserve value (deductible only through the end of 2028): Ongoing maintenance work (e.g., facade refurbishment, repairs, or the one-for-one replacement of existing building components) can currently still be deducted directly from taxable income, which reduces the current tax burden. However, with the elimination of the imputed rental value starting in 2029, the legislature will also eliminate this deduction option at the federal level (although cantons may provide special deadlines for energy-efficiency renovations until 2050).

Value-Adding Investments: Measures that improve the condition of the property beyond the original standard (e.g., the retroactive addition of a sunroom) increase the property’s investment value. These costs can also be claimed in the future to reduce the taxable value for property gains tax purposes.

Strategic Tip

In light of the impending elimination of maintenance deductions, it is now more worthwhile than ever to plan upcoming value-preserving renovations promptly and stagger them in a tax-optimized manner to fully take advantage of the tax benefits before the final system change.

Avoid Counterproductive Extravagance

Not every costly investment pays off in terms of a future resale. In many cases, overly specific “collector’s items” reduce the number of potential buyers. A classic example of this is the costly installation of a custom-made solid-wood kitchen in a rustic country-house style. If this does not align with current trends or the tastes of the target audience, the impeccably crafted installation is often completely dismantled after the sale and replaced with a minimalist, clean design. Since aesthetics are subjective, the general rule for renovations with resale in mind is: understated elegance and functional modernity achieve the greatest market appeal.

Conclusion

Investments in your own home should always strike a balance between personal comfort, tax optimization, and future marketability. Forward-thinking planning protects against poor investments and ensures the long-term value retention of your property.

Are you planning a comprehensive renovation, or would you like to have the value potential of your property professionally assessed before a renovation? We’d be happy to assist you with strategic planning.