Calculating taxable wealth in Switzerland: how it works
Taxable assets: what do they include? How can I calculate my taxable wealth? Comparis explains.
28.11.2024
iStock / Andrzej Rostek
1. Taxable assets: what do they include?
In Switzerland, you need to pay a range of taxes. These include:
Wealth tax
Income tax
Wealth tax is a tax levied by cantons and communes. The federal administration does not charge any wealth tax. You pay the wealth tax on your taxable assets. Taxable assets include:
Money: cash, payroll accounts, other bank balances including cryptocurrencies and postal balances
Securities: certificates of deposit, bonds, shares, LLC and cooperative shares, profit participation certificates and options
Shares in investment funds
Premium deposits with insurance companies
Redeemable endowment insurance: life insurance and pension insurance
Land
Precious metals: gold and silver
Vehicles: cars, boats and caravans
Horses and other livestock
Collections: stamps, coins and artwork
Art and jewellery
Note: non-taxable assets include home contents and personal effects. They are not subject to taxation. This also applies to your assets in pillar 3a and your occupational pension plan before they are drawn.
2. Calculating taxable wealth: the value of assets
The calculation of taxable wealth can vary depending on the canton and commune. The rates may also vary depending on the canton and commune.
In principle, your assets are assessed at the market value. In this context, market value means: how high would the value of the asset be in an ordinary sale? It is independent of the market value applied by insurance companies.
However, other regulations may apply to some assets:
Only redeemable insurance policies are considered assets. The term “redeemable” means that the insured event will occur in any case. This normally applies to life insurance. Therefore, you can cancel the contract and demand the redeemable surrender value from the insurance company.
The assets or the tax value results from the surrender value and the share of the surplus. Insurers send taxpayers a certificate with the tax value each year for each contract.
In the case of pension insurance in all cantons, the redeemable value of the pension counts as assets. This also applies if you already receive a pension.
You do not have to pay any taxes on pillar 3a assets and pension funds until they are paid out. This also applies to insurance solutions with a surrender value.
For securities, tax laws distinguish between listed and unlisted securities.
Listed securities
Listed securities are traded on an exchange. Here, the market value is usually the value listed on the exchange.
For taxation purposes, the price of the securities at the end of the tax period, usually on 31 December, is decisive. The prices are available on the course listings of the Federal Tax Administration.
In the case of the cantons of Basel-Stadt and Solothurn, they apply a different type of valuation for small amounts.
Unlisted securities
Unlisted securities are not officially traded on an exchange. This is why they have no listed value. In principle, the market value is considered the asset value. In the case of investments such as shares, the value of the company is also taken into account.
The amount of the market value depends on whether there is a market outside of the exchange for the shares:
There is a market for the shares: the shares are traded outside the exchange. There may also be credible prices for supply and demand. In that case, the price on 31 December is used.
There is no market for the shares: the valuation rules of Circular 28 of the Swiss Tax Conference apply (link not available in English). If the security is sold within one year, the purchase price is considered the market value.
In some cantons, there are different rules for determining the market value. You can read more about this in the wealth tax fact sheet of the Swiss Tax Conference (not available in English).
The tax value of land is not reassessed annually. Instead, a revaluation takes place at longer regular intervals. Tax law distinguishes between agricultural and non-agricultural land.
Non-agricultural land
The value of non-agricultural land varies across different cantons. Depending on the canton, the following applies:
The market value, i.e. the purchase price
A mix of market value and capitalized income value
The capitalized income value
The cantons weight the market value and capitalized income value differently. Check with your canton about the rules valid there.
Agricultural land
For agricultural land, the capitalized income value is used. Buildings used for farming are also included.
Livestock refers to the number of farm animals on a farm. These include cows, horses and pigs, for example.
In the case of livestock, how the animals are taxed depends on whether they are private or commercial animals. Moreover, the cantons calculate the value differently. Find out which method your canton uses to calculate the value in the leaflet on the valuation of livestock assets (not available in English).
Family taxation
In the case of a family, spouses and minor children count as a single economic unit. The family is taxed together. This is because the family members are economically interdependent.
The assets of unseparated spouses and minor children are added together. However, this can increase the tax burden substantially. Therefore, depending on the canton, there are also tax reliefs for families.
Calculate taxes easily
Would you like to know how much you can expect to pay in taxes? You can easily find out with the Comparis tax calculator.
3. Deductions from taxable wealth in Switzerland
Debts
You can deduct debts from your gross wealth. However, this only applies to debts already incurred. You may only deduct foreseeable debts as soon as you are liable for them. These include, for example, debts due to a guarantee.
Important: if your assets are divided among several cantons, you may only deduct the debts on a proportional basis.
Social deductions
In some cantons, you only pay taxes from a certain amount of wealth. The tax-free minimum allowance applies to the amount after all deductions. (The links to the cantonal resources in the following table are only available in the respective cantonal language.)
| Canton | Unmarried people in CHF | Married couples in CHF | Note |
|---|---|---|---|
| Bern | 100,000 | 100,000 |
|
| Basel-Landschaft | 10,000 | 10,000 |
|
| Jura | 57,000 | 57,000 |
|
| Neuchâtel | 50,000 | 50,000 |
|
| Ticino | 200,000 | 200,000 |
|
| Vaud | 59,000 | 118,000 |
|
| Zurich | 80,000 | 159,000 |
|
1 Assets in other cantons and countries are also included in the wealth that determines the tax rate. However, you only pay taxes on the assets in the corresponding canton, the taxable assets.
2 Investment income refers to income from your assets, such as interest and dividends.
4. Taxable assets: example calculation
Age: 32 years
Canton of residence: Zurich
Assets in their bank account: 50,000 francs
Investments: 30,000 francs
Car value: 25,000 francs
Value of redeemable endowment insurance: 10,000 francs, including 7,000 francs in pillar 3a
Home value: no home ownership
Amount of mortgage receivables: none
Value of collections: 5,000 francs (watch collection)
Taxable assets: 113,000 francs = sum of all values – amount in pillar 3a
Ages: 45 and 43 years, married
Number of children: 2
Canton of residence: Bern
Assets
A total of 1,702,800 francs. This total is comprised as follows:
Assets in their bank account: 250,000 francs
Children’s assets: 9,800 francs
Investments: 380,000 francs
Value of cars: 35,000 francs and 28,000 francs
Value of redeemable endowment insurance: 120,000, including 70,000 francs in the pension fund and 40,000 francs in pillar 3a
Home value: 850,000 francs
Value of collections: 30,000 francs
Deductions
A total of 664,000 francs. They consist of the following:
Amount of mortgage payments: 500,000 francs
Pension fund balance: 70,000 francs
Pillar 3a savings: 40,000 francs
Personal deductions for married couples: 18,000 francs
Children's deductions: 36,000 francs (18,000 francs per child)
Taxable assets
1,038,800 francs = sum of all assets – sum of all deductions
This article was first published on 15.12.2021
