Tax glossary
Wealth tax
Wealth tax is levied on your net assets as at 31 December — assets minus debts. It is charged by the cantons and municipalities; the Confederation does not levy a wealth tax.
Wealth tax is a cantonal and municipal tax on net assets. What counts is the position as at 31 December of the tax period — a reference-date principle. Whatever you spend on 30 December is no longer taxed; whatever arrives on 2 January is only taxed the following year.
Taxable wealth includes both movable and immovable assets: bank balances, securities, cryptocurrencies, vehicles, property at its tax value, surrender values of life insurance policies and, for the self-employed, business assets. All debts are deducted from this — mortgages, loans, credit and unpaid tax bills.
Assets held in occupational pension schemes (pension fund) and pillar 3a do not count towards taxable wealth. They are entirely exempt from wealth tax until paid out — one of the reasons why tied pension savings are so attractive from a tax perspective.
What counts and what doesn’t
Where the line is drawn determines how much tax you pay.
- Taxable: accounts, custody accounts, cryptocurrencies, cash, vehicles, property at its tax value
- Taxable: surrender value of life insurance, loans receivable, shares in undivided estates
- Not taxable: pension fund and pillar 3a assets until paid out
- Not taxable: household contents and personal belongings
- Deductible: mortgages, credit, loans, taxes owed as at 31 December
The tax value of property
Property is recorded not at market value but at its official tax value. In the Canton of Zurich this is usually well below market value. It is reassessed periodically and appears in your tax assessment.
The associated mortgage, by contrast, is deducted at its full nominal amount. Anyone who owns a heavily mortgaged property can therefore show negative net wealth and still be well off.
Tax-free allowances and rates
The Canton of Zurich has a tax-free allowance below which no wealth tax is due; it is higher for married couples than for single people and increases for each child. Above the allowance a progressive scale applies, multiplied by the tax multipliers of the canton, municipality and church.
The effective burden is moderate by Swiss standards, but it is due again every year — unlike income tax, which only applies to what flows in.
Example: a home with a mortgage
A property has an official tax value of CHF 720,000 and a mortgage of CHF 600,000. In addition there are bank balances of CHF 40,000 and a car with a current value of CHF 12,000.
Net wealth therefore comes to CHF 172,000. The pension fund assets of CHF 280,000 and the pillar 3a account of CHF 65,000 are left out — they only count towards taxable wealth in the year they are paid out.
Frequently asked questions: Wealth tax
Does my car count towards taxable wealth?
Yes, at its current value. Household contents and personal belongings, on the other hand, do not.
Can I deduct tax debts?
Yes. Taxes owed but not yet paid on 31 December can be deducted as debts — including provisionally assessed taxes.
How are joint accounts of married couples treated?
Married couples are assessed jointly; the assets of both spouses are added together. How they are split between the spouses makes no difference to the amount of tax.
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