Wealth Taxes in Europe, 2024

Internet wealth taxes are recurrent taxes on a person’s wealth, web of debt. The idea of a web wealth taxA wealth tax is imposed on a person’s web wealth, or the market worth of their whole owned property minus liabilities. A wealth tax may be narrowly or broadly outlined, and relying on the definition of wealth, the base for a wealth tax can fluctuate.
is much like an actual property taxA property tax is primarily levied on immovable property like land and buildings, in addition to on tangible private property that’s movable, like autos and tools. Property taxes are the only largest supply of state and native income within the U.S. and assist fund colleges, roads, police, and different providers.
. However as a substitute of solely taxing actual property, it covers all wealth a person owns. As as we speak’s map exhibits, solely three international locations levy web wealth taxes in Europe—Norway, Spain, and Switzerland. France and Italy levy wealth taxes on chosen property however not on a person’s web wealth per se.

2024 wealth taxes in Europe compare wealth taxes by country

Internet Wealth Taxes in Europe

Norway levies a web wealth taxA tax is a compulsory cost or cost collected by native, state, and nationwide governments from people or companies to cowl the prices of common authorities providers, items, and actions.
of 1 % on people’ wealth shares exceeding NOK 1.7 million (EUR 150,000 or USD 160,000), with 0.7 % going to municipalities and 0.3 % to the central authorities. Norway’s web wealth tax dates to 1892. Moreover, for web wealth exceeding NOK 20 million (USD 1.94 million), the tax fee is 1.1 %.

Spain’s web wealth tax is a progressive taxA progressive tax is one the place the typical tax burden will increase with earnings. Excessive-income households pay a disproportionate share of the tax burden, whereas low- and middle-income taxpayers shoulder a comparatively small tax burden.
starting from 0.16 % (in Navarra) to three.5 % on wealth shares above EUR 700,000 (USD 757,850; decrease in some areas), with charges various considerably throughout Spain’s autonomous areas (Madrid, Andalusia, Cantabria, and Extremadura provide a 100% aid). Spanish residents are topic to the tax on a worldwide foundation whereas nonresidents pay the tax solely on property situated in Spain.

Moreover, the Spanish central authorities launched a “solidarity wealth tax” in 2022 and 2023 (to be collected in 2023 and 2024) starting from 1.7 % to three.5 % on people with web property exceeding EUR 3 million (USD 3.25 million). Below this new tax scheme, the central authorities collects any further income from the solidarity tax as soon as the regional wealth tax assortment is deducted. Three regional governments of Madrid, Andalusia, and Galicia appealed the solidarity wealth tax to the Constitutional Courtroom. When the courtroom dominated in December 2023 that the solidarity wealth tax is constitutional (regardless of what consultants argued), the Spanish central authorities prolonged the solidarity tax’s utility till the regional financing system is reformed. Consequently, Madrid, Cantabria, Extremadura, and Andalusia restored the wealth tax in order that the regional governments retain the revenues the central authorities plans to gather in 2024.

In the meantime, Portugal’s resolution to prolong its tax regime for nonresidents is well timed, since extra Spanish taxpayers are contemplating altering their tax residence.

Switzerland levies its web wealth tax on the cantonal degree and covers worldwide property (besides actual property and everlasting institutions situated overseas). The tax charges and allowances fluctuate considerably throughout cantons. The Swiss web wealth tax was first carried out in 1840.

Wealth Taxes on Chosen Property

France abolished its web wealth tax in 2018 and changed it that 12 months with an actual property wealth tax. French tax residents whose web worldwide actual property property are valued at or above EUR 1.3 million (USD 1.41 million) are topic to the tax, in addition to non-French tax residents whose web actual property property situated in France are valued at or above EUR 1.3 million. Relying on the web worth of the actual property property, the tax fee ranges as a lot as 1.5 %.

Italy taxes monetary property held overseas with out Italian intermediaries by particular person resident taxpayers at 0.2 % and 0.4 % for property held in sure international locations. As well as, actual property properties held overseas by Italian tax residents are taxed at 1.06 % in 2024, up from 0.76 % in 2023.

Since 2021, Belgium has had a solidarity tax or tax on securities accounts (TSA) of 0.15 % on securities accounts with a median worth of EUR 1 million (USD 1.08 million).

Within the Netherlands, the worth of web wealth, excluding main residence and substantial pursuits in firms, is included within the earnings tax. Nonetheless, the Dutch Supreme Courtroom dominated in 2021 that this method violates European regulation relating to property rights and non-discrimination. In 2022, a brand new short-term different system for the years 2023, 2024, and 2025 was proposed the place every asset class (e.g., financial savings, money owed, and others) would have its personal deemed return. For 2024, the weighted common yield over all classes might be utilized to the entire property above a private exemption of EUR 57,000 (USD 61,697) to find out the taxable profit that might be topic to tax at a flat fee of 36 %. The federal government is aiming to have a brand new system primarily based on precise returns by 2026.

Wealth taxes not solely accumulate little income and create authorized uncertainty, however an OECD report argues that they’ll additionally disincentivize entrepreneurship, harming innovation and impacting long-term progress. As a substitute of reforming and mountaineering wealth taxes in Europe, international locations ought to repeal it.

Discover Wealth Taxes by Nation

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