Background to the Valuation Reform
Since 2009, property tax values in the Canton of Zurich have not been comprehensively updated. Meanwhile, property prices – particularly land values – have increased significantly. In recent years, court decisions have repeatedly criticised that in some cases, the valuation basis was not in line with federal law.
An external report commissioned by the Cantonal Tax Office Zurich confirms: the market values of single-family homes and owner-occupied flats have increased by more than 50% on average. As a result – independently of the ongoing political debate about abolishing the deemed rental value – the authorities are now taking action and will revise the directive on property valuation and calculation of the deemed rental value, effective from 1 January 2026.
Key Changes from 2026
Increase in Taxable Asset Values
The taxable asset value of real estate will rise by approximately 48% on average – for both single-family homes and condominiums. This significant increase is based on two main factors:
Updated land values and a reclassification of location categories. These have changed considerably across many regions in recent years.
Building values will continue to be based on the so-called time value (derived from the reinstatement value as per the building insurance). However, the allowable depreciation due to age will increase from 30% to up to 40%, benefiting owners of older properties in particular.
Adjustment of Deemed Rental Values
Until now, the deemed rental value in the Canton of Zurich has been calculated using a fixed percentage of the taxable asset value. From 2026, this simple approach will be replaced with municipality-specific derivation rates:
For single-family homes: new range between 1.7% and 3.5% (previously fixed at 3.5%)
For condominiums: new range between 2.1% and 4.2% (previously fixed at 4.25%)
This change will better reflect local market conditions. On average, deemed rental values will rise by around 10–11%. Depending on the location, age and type of property, lower adjustments or even reductions may also occur. Furthermore, property owners will have the option to apply for an individual valuation based on a comparable property.
Regional Differentiation Replaces Standardised Approach
From 2026, valuations will no longer be based on uniform cantonal values but will be differentiated by municipality and location category. For example, the number of location categories in the City of Zurich will increase from 7 to 9. Capitalisation rates for calculating the income value of multi-family houses will also be set on a municipality-specific basis.
This aims to better reflect the regional variations in property prices, rental values and investment returns.
Hardship Provision: Protection Against Excessive Burden
A positive development for many affected owners: following a ruling by the Federal Supreme Court, the Canton of Zurich plans to reintroduce a comprehensive legal basis for a hardship provision. This will apply if the new deemed rental value results in an excessive tax burden relative to income and assets. Property owners will be able to submit a hardship request from 2026 onwards.
What Does This Mean for Property Owners?
The impact of the new valuation guidelines cannot be assessed uniformly – they depend heavily on each specific property. In general, the following tendencies can be observed:
Older properties will benefit from higher depreciation allowances.
Centrally located properties (e.g. in Zurich, Kilchberg, Winterthur) are likely to face higher land and deemed rental values. Note also the provisional tax instalments for 2026: underestimations could lead to interest charges at both the cantonal and municipal levels.
Owners of condominiums in larger buildings are likely to experience more moderate adjustments.
If you do not agree with the valuation, you can request an individual review. We are happy to assist you with this using our valuation analysis tool.
Conclusion: Stay Calm – but Be Prepared
The new values will likely be issued together with the 2026 tax return at the beginning of 2027. It is advisable to critically review the new valuation and to consider at an early stage whether a hardship request or an individual valuation may be appropriate. We are happy to support you in evaluating your specific situation.
Sven Steger
Tax
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Zurich
Gain Clarity on Your Tax Situation Now
With our valuation tool, we can provide you with a tailored analysis of the impact the new property tax values will have – quickly and reliably. Contact us for a personal consultation.
