Tax deduction due to under-utilisation of an owner-occupied home

However, proving one’s eligibility for a deduction in the imputed rental value of a residential property is far from easy.
This surviving dependant meets the requirements to claim a deduction in direct federal tax due to under-utilisation of her condominium apartment.

If the owner of a single-family house or condominium apartment only uses a part of the residential property, it is considered to be under-utilised. This is often the result of children moving out or the death of a spouse. In this case, the owner can apply for a reduction in the property’s imputed rental value for direct federal taxes and – in some cantons – also for cantonal and communal tax purposes.

The requirements for this are not easy to fulfil – the rooms in question may not be used as guest rooms, or even as hobby or laundry rooms. In some cantons the unused rooms must even be cleared of furniture, while in others they can be used to store furniture. Other aspects, such as the customary practices and the applicant’s financial circumstances, will also be taken into account. A tax reduction for under-utilised property cannot be claimed for second or holiday homes, even if they are empty most of the time.  

Furthermore, owners whose homes were too big to begin with are not eligible for a deduction.