Wealth tax: how are assets taxed?

Basics of wealth tax

Wealth tax covers the entire net wealth of a taxable person on a specific reference date, usually the end of the tax period.

It is a purely cantonal tax; communes usually levy it by way of a surcharge on the cantonal rate.

Wealth tax complements income tax and is based on the idea that, in addition to current income, existing assets also reflect economic capacity. It is reassessed every year and is based on the level of assets on the relevant reference date.

Unlike income tax, the Confederation does not participate in wealth tax, which is why the tax bill here consists exclusively of the cantonal and communal shares. However, the interplay between canton and commune follows the same basic principle as for income tax: the canton determines the basis of assessment, while the canton and the commune each apply their own tax multiplier to it.

What counts as wealth?

Taxable wealth includes, among other things, bank balances, securities, real estate and other rights with a monetary value.

Household effects and personal items are generally not taxable.

Shares of business assets in the case of self-employment as well as certain receivables and participations may also count as taxable wealth. In principle, the market value is decisive, although individual assets are valued according to special cantonal rules.

• Bank and postal account balances
• Securities and participations
• Real estate at its tax value
• Vehicles and other assets of significance

Deduction of debts and valuation

Debts can be deducted from gross wealth so that ultimately net wealth is taxed. These include, for example, mortgages and private loans.

The valuation of individual assets, such as real estate or unlisted securities, follows cantonal valuation rules.

For debts to be recognised, they must generally exist on the reference date and be capable of being evidenced accordingly, for example by bank statements or loan agreements. Careful documentation makes it easier to record them correctly in the tax return.

Tax-free allowances and tax multiplier

Many cantons have a tax-free allowance below which no wealth tax is owed. The specific amount is set annually.

Likewise, the applicable tax multiplier varies considerably from canton to canton and, in some cases, from commune to commune.

These cantonal differences can lead to noticeably different burdens for comparable wealth. A comparison between cantons is therefore of only limited significance and should always take the individual guidelines into account.

As a practical approach, it is advisable to update your own overview of assets at least once a year, for example immediately after receiving the bank certificates. This allows you to trace changes compared with the previous year and to answer queries from the tax authority more quickly.

If you are unsure about the valuation of individual assets, such as unlisted participations or more complex investment structures, it is worth consulting the responsible tax administration or a specialist at an early stage rather than transferring unverified assumptions into your tax return.

A comparison with the previous year's declaration can also help to identify unintended gaps or omissions at an early stage, before the tax return is submitted.

This continuity from year to year also makes it easier for the tax authority to check the plausibility of the information and can reduce queries.

Typical mistakes when declaring wealth

A widespread mistake is the incomplete recording of assets, such as forgotten accounts at smaller banks, undeclared cryptocurrencies or participations in unlisted companies. Such assets also generally form part of taxable wealth and must be declared in full.

The correct valuation on the reference date is also frequently underestimated: what counts is generally the level of assets at the end of the tax period, not an arbitrary point in time during the year. Anyone who transfers interim fluctuations in value without reflection risks an incorrect declaration.

Mistakes also creep in with the deduction of debts, for example when private loans are not sufficiently documented or debts are claimed without a clear link to the reference date. An orderly filing of bank statements and contracts makes it easier for the tax authority to trace the information.

Relationship to income tax

Although wealth tax and income tax are assessed separately, they often concern the same underlying assets: income from assets is subject to income tax, while the assets themselves are subject to wealth tax.

In tax planning, it is therefore worth considering both types of tax together, particularly in the case of larger assets or complex investment structures.

An illustrative example without specific figures: if savings are held in an account, the annual interest income is subject to income tax, while the account balance itself on the reference date is subject to wealth tax. If the same money is instead invested in an owner-occupied property, both the valuation and the way it is recorded for tax purposes change.

What you should check

• Draw up a complete overview of your assets
• Obtain bank certificates as at the reference date
• Document debts and mortgages
• Check the tax values of real estate
• Keep a list of securities
• Take account of cantonal tax-free allowances

Frequently asked questions