Net wealth taxes, recurrent taxes on an individual’s wealth net of debt, are a concept similar to real property taxes. However, instead of only taxing real estate, net wealth taxes cover all wealth an individual owns. As of today, only three countries in Europe levy net wealth taxes—Norway, Spain, and Switzerland. France and Italy, on the other hand, levy wealth taxes on selected assets but not on an individual’s net wealth per se.
In Norway, a net wealth tax of 1 percent is levied on individuals’ wealth stocks exceeding NOK 1.7 million (EUR 150,000 or USD 160,000), with 0.7 percent going to municipalities and 0.3 percent to the central government. For net wealth exceeding NOK 20 million (USD 1.94 million), the tax rate is 1.1 percent.
Spain’s net wealth tax is a progressive tax ranging from 0.16 percent (in Navarra) to 3.5 percent on wealth stocks above EUR 700,000 (USD 757,850; lower in some regions), with rates varying substantially across Spain’s autonomous regions. Additionally, the Spanish central government introduced a “solidarity wealth tax” in 2022 and 2023 (to be collected in 2023 and 2024) ranging from 1.7 percent to 3.5 percent on individuals with net assets exceeding EUR 3 million (USD 3.25 million).
Switzerland levies its net wealth tax at the cantonal level and covers worldwide assets (except real estate and permanent establishments located abroad). The tax rates and allowances vary significantly across cantons.
France abolished its net wealth tax in 2018 and replaced it that year with a real estate wealth tax. Italy taxes financial assets held abroad without Italian intermediaries by individual resident taxpayers at 0.2 percent and 0.4 percent for assets held in certain countries. In addition, real estate properties held abroad by Italian tax residents are taxed at 1.06 percent in 2024, up from 0.76 percent in 2023.
Despite the variations in wealth tax systems across Europe, an OECD report argues that wealth taxes can disincentivize entrepreneurship, harming innovation and impacting long-term growth. Therefore, instead of reforming and hiking wealth taxes in Europe, countries should consider repealing them.
For more detailed information on wealth taxes in Europe, you can visit here.