Wealth Tax in Switzerland: What Expats Need to Know

In addition to income tax, wealth tax is an important part of the Swiss tax system. Unlike in many other countries, Switzerland taxes not only income but also net wealth. For many expats coming from countries without a wealth tax, this obligation is new and often comes as a surprise. In this article, you will learn how wealth tax works in Switzerland, which assets are taken into account, and what expats need to keep in mind when filing their tax return.

The Basics of Wealth Tax

Wealth tax is levied exclusively by the cantons and municipalities. There is no wealth tax at the federal level. It is calculated based on net assets as of December 31 of the tax year.

What Counts as Taxable Wealth?

Taxable assets include, among others:

• Bank account balances
• Securities and shares
• Real estate in Switzerland and abroad
• Vehicles, art, and other valuables
• Cryptocurrencies (according to the FTA valuation list)

What Can Be Deducted?

Debts such as mortgages or personal loans can be deducted from assets. The result is the taxable net wealth.

Wealth Tax for Expats Paying Withholding Tax

Expats with a B or L residence permit who only pay withholding tax are generally not subject to wealth tax. However, once a subsequent ordinary assessment (NOV) applies – for example, due to income above CHF 120,000 or because a tax return is filed voluntarily – assets also become subject to taxation.

This means: anyone required to file a tax return must declare their entire worldwide assets, both in Switzerland and abroad.

Valuation of Assets

Real Estate

• Swiss property: assessed at the cantonal tax value, usually lower than market value.
• Foreign property: declared at market value but often taxed in the country of location.

Securities and Bank Accounts

Shares, funds, and bank balances are valued at year-end prices or balances as of December 31. Banks issue tax statements for this purpose.

Cryptocurrencies

Cryptos must be listed in the securities inventory. Valuation is based on the official list published by the Federal Tax Administration (FTA). For coins without an official rate, market values apply.

Vehicles and Luxury Goods

Cars, boats, and valuable art are considered assets. For vehicles, tax authorities use the current market value.

Cantonal Differences

Wealth tax rates vary significantly across cantons:

• Zug and Schwyz: very low wealth tax rates, attractive for wealthy expats.
• Geneva, Vaud, Basel-Stadt: higher wealth taxes, as these cantons rely more heavily on taxing assets.
• Zurich: moderate burden, with progressive rates depending on wealth level.

In addition, municipalities levy their own share of wealth tax, further influencing the overall burden.

Double Taxation and Credit

Expats must be aware that double taxation agreements (DTAs) work differently for wealth tax compared to income tax.

• Real estate is always taxed in the country where it is located.
• Foreign assets are not taxed again in Switzerland but are taken into account when determining the tax rate. This increases the effective rate on assets taxable in Switzerland.

Example: An expat owns CHF 200,000 in Swiss bank assets and a property in Germany worth CHF 400,000. The property is taxed in Germany, but Switzerland includes it in calculating the rate – raising the tax burden on the CHF 200,000 held in Switzerland.

Practical Tips for Expats

• Clarify early: Check whether you need to file a regular tax return, which makes you liable for wealth tax.
• Full declaration: Report foreign assets, even if they are taxed abroad.
• Deduct debts: Mortgages and loans reduce taxable wealth.
• Compare cantons: Wealth tax rates differ greatly – important when choosing where to live.
• Keep records: Have bank statements, securities reports, and property valuations ready.

Conclusion: Keep an Eye on Wealth Tax as an Expat

Wealth tax is an integral part of the Swiss tax system and applies to expats once they are required to file a tax return. While debts reduce the taxable amount, foreign assets can raise the effective tax rate in Switzerland. The differences between cantons are significant – an important factor when deciding where to live. By carefully documenting assets and considering double taxation rules, expats can stay compliant and optimize their tax burden.