In Switzerland, the Eigenmietwert is an additional tax on the imputed rental income on people who own their primary residence. Generally it is implemented as 70% of market value. In some cantons, e.g. Basel-Stadt, the Eigenmietwert is simply 3% of the taxable property value.

The wealth tax is simply a tax on assets. This means that in Switzerland, you are taxed double, once on income and then again on assets.

If you own your own residence, the above taxes are relevant in estimating whether it would be beneficial to keep a mortgate versus paying it off. Let's calculate this using examples:

House worth	1,500,000
Loan	1,050,000
Eigenmietwert (3% of property value)	45,000
Taxable income	150,000
Taxable income + eigenmietwert	195,000
Interest Payment @ 1.1% p.a.	-11,550
Final taxable income	183,450
Income Tax @ 25%	45,862.50
Wealth Tax (property worth - loan) @ 1%	4,500
Total $$$ paid	61,912.50

Essentially, the eigenmietwert is adding 45,000 to the taxable income. To keep the example simple and not complicate it with tax brackets, with a total tax rate of 25%, the additional payment on 45,000 worth of Eigenmietwert is 11,250 per year. Thus, with a 1.1% loan interest rate the total money paid out is 61,912.50 for the year. What becomes really interesting is that at a higher interest rate the numbers change dramatically:

Interest Payment @ 3% p.a.	-31,500
Final taxable income	163,500
Income Tax @ 25%	40,875
Wealth Tax (property worth - loan) @ 1%	4,500
Total $$$ paid	76,875

Note how the tax paid to the government has reduced. However, the total amount is ~15,000 more than in the previous scenario! Let's look at another example:

Interest Payment @ 5% p.a.	-52,500
Final taxable income	142,500
Income Tax @ 25%	35,625
Wealth Tax (property worth - loan) @ 1%	4,500
Total $$$ paid	92,625

So yes the tax has now reduced by ~10,000 compared to the first scenario but the total money spent is an extra ~30,000! Here's an example in the other direction. Assume that you are running your own bank and offer yourself a 0.5% loan interest rate:

Interest Payment @ 0.5% p.a.	-5,250
Final taxable income	189,750
Income Tax @ 25%	47,437.50
Wealth Tax (property worth - loan) @ 1%	4,500
Total $$$ paid	57,187.5

This is better than in the first scenario. Now imagine that you had no loan at all. Then all you'd be paying is the Eigenmietwert + the wealth tax:

Final taxable income	195,000
Income Tax @ 25%	48,750
Wealth Tax (property worth) @ 1%	15,000
Total $$$ paid	63,750

This is now much worse than the first scenario mostly due to the wealth tax kicking in fully. So keeping a loan of ~1% or lower seems to be the sweet spot for keeping total money paid out to the minimum. However, do note that the income tax is not an exact 25% and in the above examples no other deductions have been taken into account (the effective tax in Basel-Stadt for a family with 2 kids is ~20%). The wealth tax is also progressive and not quite 1% (closer to 0.6% for Basel-Stadt). Thus, we can safely assume that the interest rate would need to be closer to 0.8% or lower to be able to gain an advantage with respect to tax obligations.

The idea that the tax paid is reduced by keeping a mortgage and using the interest payments to offset taxable income is correct, however the total money spent needs to also take into account the interest being paid as well. If we even look at some black swan events where property values drop, then keeping a massive loan would also entail the risk that one is immediately on the hook to repay a good chunk of the mortgage because the debt-to-value ratio is now borked.

To summarize, I'll take the fixed Eigenmietwert payment for ~12,000 / year + the wealth tax any day over a >1% interest rate that I need to periodically negotiate with a private enterprise (unless of course someone is willing to give me free money). At the very least, I know for a fact that the government is offering me basic services :).

Disclaimer: I am not a lawyer and this is not financial advice. This is simply my opinion based on example numbers. There is of course, an opportunity cost to paying off the mortgage. If I take money from the bank at 1% and can invest it somewhere with a higher rate of return, then depending on my financial situation, it might make better sense. The trick is finding these lucrative investment opportunties. Consult a financial advisor for your own situation.