Wealth Tax for Expats: What Must Be Declared in Switzerland?

Many expats in Switzerland know that their income is taxed – often via withholding tax. Less well known is that Switzerland also imposes a wealth tax. This tax applies to the worldwide assets of persons who are tax-resident in Switzerland. For expats, this means that not only Swiss bank accounts, but also real estate or investments abroad must be correctly declared.

This article explains how wealth tax works in Switzerland, which assets must be declared, and what special considerations apply to expats.

Basics of Wealth Tax in Switzerland

What is Wealth Tax?

Wealth tax is a cantonal tax on the net assets of a taxable person. It is not levied at the federal level, but solely by cantons and municipalities.

Who Is Subject to Wealth Tax?

All persons tax-resident in Switzerland are subject to wealth tax. You are considered tax-resident if:

• You have a permanent residence in Switzerland, or
• You stay for more than 30 days with employment or 90 days without employment.

Effectively, almost all expats with B- or C-permits are subject to wealth tax.

Which Assets Must Expats Declare?

Bank Accounts and Securities

• Swiss and foreign bank accounts
• Securities such as stocks, funds, bonds
• Cryptocurrencies (using the tax values published by the Swiss Federal Tax Administration)

Real Estate

• Properties in Switzerland must be fully declared.
• Properties abroad must also be declared but are only used to determine the tax rate (they increase the rate but are not taxed directly in Switzerland).

Insurance and Pension Assets

• Surrender values of life insurance policies
• Assets in occupational pensions (second pillar) and Pillar 3a are usually exempt from wealth tax

Movable Assets

• Vehicles, artworks, or jewelry must be declared if they are of significant value.

Valuation of Assets

Bank Accounts and Securities

These are valued at the year-end rate of the relevant tax year. The Swiss Federal Tax Administration publishes official tax rates annually.

Real Estate in Switzerland

Valued at the cantonal tax value, which is often lower than the market value.

Real Estate Abroad

Valued at market value or a comparable locally recognized value. Transparency to the tax authorities is important.

Deductions for Wealth Tax

Debts

• Mortgages, private loans, and other debts can be deducted from assets.

Flat Deductions

• Some cantons allow flat deductions or include management costs for securities.

Tax Allowances

• Each canton sets allowances. Wealth tax applies only if net assets exceed this threshold.
  • Example: In Zurich, the allowance is approximately CHF 77,000 for individuals and CHF 154,000 for married couples.

Special Considerations for Expats

Double Taxation Agreements

Since foreign real estate is taxed in the country where it is located, Switzerland applies a tax credit mechanism for wealth tax. Foreign assets affect the tax rate, but are not taxed twice.

Withholding Tax Expats

Expats subject to withholding tax (e.g., B- or L-permit with income under CHF 120,000) usually do not need to file a separate wealth tax declaration. However, if a regular assessment is required, assets are also considered.

Leaving Switzerland

When leaving Switzerland, assets must be declared up to the date of deregistration. Afterward, wealth tax applies in the new country of residence.

Practical Examples

Example 1: Bank Accounts in Multiple Countries

An expat with a B-permit lives in Basel and has both a Swiss account and an account in Germany. Both balances must be declared on the Swiss tax return.

Example 2: Property Abroad

An expatriate family owns a house in Italy. This house is declared in the Swiss tax return, but only affects the tax rate, not the actual wealth tax due in Switzerland.

Common Mistakes and Tips

Common Mistakes

• Not declaring foreign bank accounts
• Incorrect valuation of properties abroad
• Assuming withholding tax expats do not need to declare assets

Tips for Expats

• Collect all bank statements and securities portfolios at year-end
• Have foreign properties valued realistically
• Use official tax rates for foreign currencies and securities
• Consult a tax advisor for complex international asset situations

Conclusion

Wealth tax is an important but often underestimated part of tax obligations in Switzerland. Expats who are tax-resident in Switzerland must declare their worldwide assets – from bank accounts to properties abroad. By applying double taxation agreements and cantonal allowances, a fair taxation is ensured.

Those who understand the rules, document carefully, and consider cantonal differences can fulfill their wealth tax obligations correctly and avoid legal risks.