News

Amendment of the directive on the valuation of properties from 2026 tax period in the canton of Zurich

Starting point

The currently valid property valuation in the Canton of Zurich has been in force since 2009. Every property owner in the canton of Zurich has received one if they own an apartment or a house.

Due to current case law, the Canton of Zurich has now been forced to revise its old directive. The formula valuation and the corresponding (old) land values resulted in property tax values and imputed rental values that were too low. The Tax Appeal Court and the Administrative Court of the Canton of Zurich reprimanded the tax office, as the relevant values were no longer within the legal range and no longer complied with federal law. According to case law, imputed rental values may not be lower than 60 percent of the market rent and property tax values may not be less than 70 percent of the market value of the property.

Real estate prices have risen steadily in recent years. This trend is now also reflected in the revised directive. With the adjustment of the directive from the 2026 tax period, the property tax value for single-family homes will increase by an average of 49 percent (apartments: 48 percent) and the imputed rental value will be increased by 11 percent (apartments: 10 percent).

The structure of the property valuation will basically remain the same. All relevant parameters were reviewed for the new directive. Among other things, the location classes were refined and the building land prices adjusted. The new location classes are already available in the GIS browser. In addition, the age devaluation of the property is now reduced by up to 40 percent instead of the previous 30 percent, which is of particular benefit to long-standing owners of older properties.

There are no longer uniform rates for calculating the imputed rental value. Depending on the municipality, the derivation rates for single-family homes are between 1.7 and 3.5 percent
(previously 3.5 percent) and for apartments between 2.1 and 4.2 percent (previously 4.25 percent). The derivation rates are listed in detail in the annex to the directive.

The previously uniform capitalization rate (previously 7.05%) for deriving the capitalized earnings value for multi-family and commercial buildings has also been abandoned. The rates are now between 4.8 and 6.5 percent. This means that the property tax values of these properties will also be noticeably increased.

LNB26LNB09
Property tax assets
Age-related devaluationPer year 1 % (max. 40 %)Per year 1 % (max. 30 %)
Underlying valueunderlying x 1’120 %underlying x 1’000 %
Location classesRefined per municipality
Capitalization rate apartment building4,8 % – 6,5 %7,05 %
Rental values
Single-family house derivation set1,7 % – 3,5 %3,5 %
Condominium ownership derivation set2,1 % – 4,2 %4,25 %

Effects on the tax return

The increase in owner-occupied rental and property tax values will therefore lead to an increase in the tax burden.

The new property valuations will be communicated to taxpayers at the beginning of 2027 and must then be declared for the first time in the 2026 tax return.

Any appeals against the new property valuation can only be made upon receipt of the assessment decision from the municipality/canton for the 2026 tax period. Objections to the adjusted property valuation must be supported by substantiated evidence – this is usually a market value appraisal. An appraisal must show ways and criteria that make the result appear comprehensible to an outsider.

From our own experience, the tax office places high demands on the evidence to be submitted in this respect.

We will be happy to support you in checking your property valuation and, where necessary, take the necessary steps against the property valuation.

Married with 2 kids Married with 2 kids Retired couple
Living situationApartment Zürich cityApartment Bülach, bought 2018Single-family house Seuzach
Income138 000103 90077 600
Assets100 000370 000617 000
Asset tax value to date500 000770 000517 000
New asset tax value1 094 000802 000672 000
Rental value to date19 90020 60018 100
New rental value25 10022 40018 800
Additional burden+ 2078+ 362+ 403
Source: Finance Department of the Canton of Zurich

Underutilization of rooms & hardship rule

Did you know that if a room is permanently and demonstrably no longer used, a deduction for unused rooms can be claimed? It may be worth reviewing your personal circumstances for the 2026 tax period at the latest. We will be happy to support you in this regard. Furthermore, the cantonal government is reintroducing the hardship rule at cantonal level on the same date (01.01.2026) due to the expected higher imputed rental and property tax values. As a rule, a hardship deduction can be claimed if the imputed rental value leads to an excessive tax burden in relation to the available income and assets of a household in the long term. If you meet these parameters, we will claim this deduction in your personal tax return.

26.09.2024/mgo

back