Wealth Tax: What Is It?
Wealth tax in Switzerland is a direct tax levied on the total value of an individual's personal property and assets. The tax is calculated on the net wealth of the taxpayer, i.e. all assets, not including debts.
Unlike the income tax, which is based on a person's income over the course of a year, the wealth tax focuses on accumulated wealth. The wealth tax is also typically lower than income tax .
Wealth tax is levied solely by the canton of residence or by the location of a property. This competence was entrusted to the cantons by the confederation and was codified by theart. 2 of the LHID.
Taxable Wealth
Here is a non-exhaustive list of the various items subject to wealth tax, and which must therefore appear in the tax return. These may vary from canton to canton.
Real estate properties : This concerns all types of buildings.
It should also be noted that real estate owned abroad does not influence the tax rate, although it must be declared.
Please check, however, that the country where you own your property does not have a double taxation agreement with Switzerland. The neighbouring country of France, for example, has a double taxation agreement with Switzerland.
Financial instruments This category includes items such as shares in a public limited companybonds, stocks, and shares in companies or associations.
Cash and bank deposits This is anything that represents a sum of money. Examples include cash, bank deposits and current account balances.
Units in collective investments with direct real estate The difference between the total value of the investment's assets and the value of its real estate.
Receivables: Mortgages and unsecured claims.
Business assets All elements of business assets.
Life insurance and pensions We're talking here about the cash surrender value of life and pension insurance.
Jewelry and silverware These are included in this category only if their value exceeds CHF 2,000.
Precious metals Gold, silver or platinum, for example.
Livestock: Included here are both dead and live cattle.
Non-Taxable Wealth
Furniture and Collections: Furniture, including artistic and scientific collections that can be considered as such.
In Geneva, collections are generally not taxed. However, this directive is not followed by other cantons. You should therefore contact your local tax authorities for further information.
Clothing: All types of clothing.
Household utensils: The various tools used in the household.
Books: Books for the personal use of the taxpayer and his family.
Retirement savings (LPP): This is the capital paid as part of savings for occupational pension provision (BVG).
Estimation of Items Subject to Wealth Tax
Moveable Assets
- Cryptocurrencies
- Cash
For tax purposes, you will need to provide a bank statement showing balance as at December 31.
- Listed securities
- Unlisted securities in Switzerland
This is based on yield and intrinsic value. The special rules for real estate companies are in accordance with CSI Circular No. 28.
- Foreign unlisted securities
The treatment is similar to Swiss non-listed securities. Detailed financial documents will be required, with an option of Fiscal Ruling.
- Loans granted
- Commercial securities
- Life insurance
- Jewelry and silverware
Such assets will be valued at resale value under normal market conditions.
Real Estate Assets
- Buildings
The tax value is based on the purchase price indicated in the contract. It is taxable to the owner if subject to usufruct.
- Real estate abroad
The purchase price is converted into Swiss francs using the tax rate for the year of acquisition. It is included only to determine tax rate.
- Real estate received (donation/succession)
The tax value established by the tax authorities at the time of the donation or inheritance.
- Commercial and/or industrial buildings
Valued according to the current value of the land, buildings and ancillary facilities.
- Farm buildings
Valued at their yield value, including the part used as housing for farming and forestry operations.
Authorized Debts and Deductions
Deductible debts include unsecured debts, mortgages, justified private debts and negative account balances.
In the geographical breakdown of debts in Switzerland, only the proportional share of debts linked to taxable assets is deductible.
In Geneva, flat-rate deductions are available. These are CHF 82,200 for a single taxpayer and CHF 164,400 for a couple. This means that a taxpayer with assets of less than CHF 82,200 pays no wealth tax, so keep in mind that the wealth tax does not apply to everyone, but only starting at a certain income.
Other flat-rate deductions are available for the self-employed and partners in partnerships.
For more information, please consult this article on tax deductions in Geneva.
Determining Asset Value
To determine the value of a property, you need to know its market value. We'll look at a few examples and give you an idea of how this value is calculated for different properties.
In the case of real estate, for example, unless it is used for agricultural activities, it will generally be valued at market value.
However, this value varies from canton to canton. Some use the market value to estimate how much a property is worth, others use the yield value.
Wealth Tax by Canton
As with income tax, cantons are free to set their own wealth tax rates. Some cantons have decided to keep their tax rates moderate, others a little higher, but with other advantages.
Here's a list to give you an idea of the cantonal and communal taxes for a single person without children. Tax amounts are in CHF.
| Township, city | 100k | 250k | 500k | 1 mio | 5 mio |
| AG - Aarau | 0 | 366 | 1106 | 2941 | 20409 |
| AI - Appenzell | 116 | 462 | 1040 | 2195 | 11435 |
| AR - Herisau | 92 | 648 | 1637 | 3673 | 19953 |
| BE - Bern | 153 | 650 | 1632 | 4111 | 28018 |
| BL - Liestal | 51 | 571 | 2262 | 6792 | 37381 |
| BS - Basel | 28 | 394 | 2298 | 6050 | 39626 |
| FR - Fribourg | 142 | 781 | 2014 | 5020 | 26188 |
| GE - Geneva | 81 | 649 | 2011 | 5485 | 44286 |
| GL - Glarus | 87 | 605 | 1469 | 3197 | 17021 |
| GR - Chur | 60 | 400 | 1216 | 2987 | 15771 |
| JU - Delémont | 173 | 668 | 1605 | 3989 | 26495 |
| LU - Lucerne | 159 | 598 | 1331 | 2797 | 14522 |
| NE - Neuchâtel | 286 | 1236 | 3420 | 6840 | 34200 |
| NW - Stans | 131 | 319 | 632 | 1259 | 6269 |
| OW - Sarnen | 106 | 320 | 675 | 1386 | 7074 |
| SG - Saint-Gall | 107 | 746 | 1814 | 3947 | 21015 |
| SH - Schaffhausen | 143 | 393 | 995 | 3140 | 21122 |
| SO - Solothurn | 235 | 578 | 1105 | 2160 | 13765 |
| SZ - Schwyz | 101 | 503 | 1005 | 2010 | 10050 |
| TG - Frauenfeld | 0 | 418 | 1114 | 2505 | 13637 |
| TI - Bellinzona | 20 | 590 | 1749 | 4409 | 23770 |
| UR - Altdorf | 70 | 361 | 848 | 1823 | 9623 |
| VD - Lausanne | 188 | 922 | 2615 | 6478 | 38141 |
| VS - Sion | 284 | 958 | 2205 | 5127 | 31345 |
| ZG - Zug | 0 | 100 | 472 | 1750 | 12470 |
| ZH - Zürich | 49 | 213 | 694 | 2118 | 24242 |
Optimise Wealth Tax
There aren't many options available for lowering the wealth tax rate, but there are a few ideas that can be implemented.
While not the most ideal, using the table above, you can compare and choose a canton to live in with a lower tax rate, thus saving money.
Another option would be to invest in real estate, as the taxable value of a property will generally be lower than its actual value.
You can also transfer funds to tax-free assets such as 2nd and 3rd pillars, which will reduce your taxable assets.
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Frequently Asked Questions
When does wealth tax liability begin and end?
Unlimited tax liability generally begins when a person takes up residence in Switzerland or starts a tax residence.
It ends with departure from Switzerland or death. Limited liability begins with the acquisition of taxable items in Switzerland and ends with their disappearance.
What is the tax liability of spouses?
Are life insurance policies subject to wealth tax?
How are the assets of minor children treated for tax purposes?
The wealth of minor children is generally added to that of their parents or the person with parental authority until they reach the age of majority, when they begin to be taxed individually on their personal wealth.
How are debts treated when calculating wealth tax?
Established debts are deductible from the total value of assets to determine taxable net wealth. This includes mortgages, personal loans and other documented debts.
