1) Fully tax deductible mortgage interest
2) Full value of mortgage goes against your assets, essentially removing wealth tax for most people.
3) Within any given year, you can either take a 10% * Imputed rental income deduction for maintenance or a specific fully itemized amount against your tax bill. Except that nothing prevents you from taking the 10% and not doing any renovations, and then slamming all the renovations in one year and removing the add on entirely.
4) The first 66% of the home collateral value are under an interest only mortgage, so if you were smart enough to get the 15yr fixed rate you basically be getting a huge loan for like 1% interest payment per year to control a house which you need to live in anyway.
5) Last but not least, local tax offices have a lot of discretion in most cantons to determine what the imputed rent is. The legal requirement is that the imputed rent must be at least 60% of market rent, but there is basically no consistency between cantons as to what number they shoot through, anywhere from like 65 to 90%.
The end result is that high bracket earners are super incentivized to lever up and get the biggest house they can, since they would essentially be investing into a growth asset that reduces their tax income. Since Switzerland is a small country and not a lot of space the end result is that eventually the high earners overbid normal houses.