What is Wealth Tax?

Wealth tax is an annual tax on the net worth of an individual — total assets (real estate, investments, cash, vehicles) minus liabilities — levied in a handful of European countries including Switzerland, Spain, Norway and (limited) France.

Switzerland is the most prominent wealth-tax country. Each canton charges 0.1–1.0% per year on net wealth above a threshold (typically CHF 70,000–200,000 for singles). Combined with progressive income tax, total tax can reach 40% of total annual return for high-net-worth individuals in cantons like Geneva.

France abolished its broad ISF in 2018 and replaced it with the IFI (Impôt sur la Fortune Immobilière), which applies only to real estate above EUR 1.3 million at progressive rates up to 1.5%. Spain charges Patrimonio at 0.2–3.5% with regional variation.

Wealth tax is unusual globally because most economists argue it discourages saving and capital formation. Defenders point to its role in reducing inequality and funding public services. Effective planning includes structuring assets in tax-favoured wrappers (pensions, life insurance), strategic residency choices and using cantonal arbitrage in Switzerland.

Example

A Zurich resident with CHF 2 million net wealth pays roughly CHF 5,000 wealth tax per year (0.25% above a CHF 77,000 allowance). The same person in Zug pays around CHF 2,000; in Geneva, around CHF 13,000.

Related terms

Property Tax

Property tax is an annual tax levied by a local or regional government on the assessed value of real estate — land and buildings — paid by the owner and used to fund municipal services.

Inheritance Tax

Inheritance tax (or estate tax) is a tax on assets transferred from a deceased person to their heirs, calculated either on the deceased's estate as a whole or on each beneficiary's share, with rates depending on the relationship to the deceased.

Capital Gains Tax

Capital gains tax is the tax due on the profit realised when you sell an asset — shares, bonds, real estate, crypto or a business — for more than you paid for it, with rules that differ sharply across European jurisdictions.

Tax Residency

Tax residency determines which country has the primary right to tax your worldwide income, based on rules such as days physically present, location of permanent home, centre of vital interests and family location.

Frequently asked questions

What is included in net wealth?+

All assets at market value: real estate, securities, cash, vehicles, vested benefits — minus mortgage and other debts.

Are pensions taxed?+

Vested benefits and pillar 3a are exempt while active in Switzerland; tax applies after lump-sum withdrawal.

Can I move to a low-tax canton?+

Yes — choosing canton (e.g. Zug, Schwyz, Nidwalden) can roughly halve combined income+wealth tax.