What you left at home: foreign property, accounts and income on a Swiss return (2025)

Key takeaways

• As a Swiss resident you declare worldwide income and worldwide wealth. Declaring is not the same as being taxed on it.
• Property abroad is declared but not taxed in Switzerland. It still raises the rate applied to what Switzerland does tax.
• Foreign bank accounts and securities are fully taxable here. The balance counts as wealth, the interest and dividends as income.
• Debts and debt interest are split in proportion to where your assets sit, so a mortgage abroad is only partly deductible here.
• Use the year-end exchange rate for wealth and the average rate for income. The federal tax administration publishes both, on one page, for each tax year.

"It stays in my home country so it stays out of my Swiss return" is the most expensive misunderstanding expats bring to Switzerland. Declaring an asset and being taxed on it are two separate steps, and treating them as one is what causes trouble.

Declared, taxed, or rate-determining?

Three outcomes are possible, and working out which one applies to each asset is most of the job.

What you have	Declare it?	Taxed in Switzerland?
Foreign bank account	Yes	Yes, balance as wealth and interest as income
Foreign securities	Yes	Yes, value as wealth and dividends as income
Foreign real estate	Yes	No, but it raises your rate
Rent from foreign property	Yes	No, but it raises your rate
Foreign pension you already draw	Yes	Usually yes, subject to the relevant treaty
Foreign mortgage	Yes	Deductible in proportion to your Swiss assets
Foreign inheritance received	Yes	The assets become your wealth from then on

Rows three and four cause most of the confusion, so the next section covers them on their own.

Taxed in Switzerland

• Foreign bank account, balance as wealth and interest as income
• Foreign securities, value as wealth and dividends as income
• A foreign pension you already draw, subject to the treaty

Declared, but not taxed here

• Foreign real estate, which still raises the rate on your Swiss income
• Rent from foreign property, which raises the rate the same way
• The notional rental value of a foreign home you use yourself

Leaving the right-hand column off your return saves you nothing. It only makes the return wrong.

Property abroad: exempt, but not invisible

If you own a flat or house outside Switzerland, Switzerland does not tax it. Federal law says so directly: tax liability is unlimited, "but it does not extend to businesses, permanent establishments and real property abroad" (DBG Art. 6 para. 1). The right to tax immovable property belongs to the country the property sits in, and Swiss treaties follow that consistently.

It does not disappear from your return, though. Switzerland applies exemption with progression (DBG Art. 7 para. 1): the property and its rent set which rate applies to your Swiss income and wealth, then drop out of the amount taxed. So owning property abroad can raise the tax on your Swiss salary even though the property itself is never taxed here.

Zurich states the duty plainly: declare all Swiss and foreign income and wealth, and the tax office handles the allocation.

1. 1You declare itThe property's value, and the rent or notional rental value
2. 2The tax office allocates it abroadSwitzerland gives up the right to tax it
3. 3It still counts toward your rateYour total income and wealth set the percentage
4. 4That percentage is applied to your Swiss income and wealthYour Swiss tax bill rises, the property itself is not taxed here

Skipping step one does not skip step four. It only makes the declaration wrong.

Two details follow from that:

• A property you use yourself carries a notional rental value (EigenmietwertEigenmietwertImputed rental valueFRvaleur locativeITvalore locativoNotional rental income added to the taxable income of people who live in a home they own. Its abolition has been approved and comes into force on 1 January 2029.Where you see itIn the property section, if you own where you live.Open in the glossary →), which sets your rate in the same way even though nobody pays you rent.
• A property standing empty is still declared. Vacancy may affect the value; it does not remove the obligation.

Switzerland voted in September 2025 to abolish the notional rental value, and the Federal Council set the change for 1 January 2029. It does not touch the 2025 to 2028 returns.

How a foreign mortgage is split

Swiss tax does not let you deduct a foreign mortgage in full against Swiss income. Debts and debt interest are allocated in proportion to where your assets are located. If a large share of your wealth sits in a property abroad, the same share of your debt and debt interest is allocated abroad, and only the remainder reduces your Swiss taxable income.

The split does not follow which property the loan is secured on. A mortgage registered against your flat abroad is not automatically foreign debt, and a loan from a Swiss bank is not automatically Swiss debt. The percentage comes from where your assets sit, and that percentage is then applied to the debt and to the interest.

The rule comes from DBG Art. 6 para. 3. For businesses, permanent establishments and real property it draws the boundary between Switzerland and abroad "according to the principles of federal law on the prohibition of intercantonal double taxation", and that body of law is the source of the proportional debt split.

Zurich adds a limit of its own: debt interest on private assets is deductible only up to the gross return on your private movable and immovable property (including the notional rental value) plus a further CHF 50,000.

Which exchange rate?

This gets asked constantly, and there is an official answer to it.

What you are converting	Which rate
Balances, property values and securities values at 31 December (wealth)	The year-end rate
Salary, rent, interest and dividends received during the year (income)	The average rate for the year

ESTV (Eidgenössische Steuerverwaltung, the federal tax administration) publishes both on one page per tax year, under two headings matching the table: "Devisenkurs (Verkauf) am Ende der Steuerperiode" (the 31 December selling rate) and "Durchschnittlicher Devisenkurs (Verkauf) der Steuerperiode" (the average across the period). Zurich points at the same list.

The common mistake is to apply one convenient rate to everything. A year-end rate on a full year's rental income overstates or understates it, depending which way the currency moved.

Foreign accounts are not private

The assumption that a home-country account is invisible to the Swiss tax office is still common.

Switzerland exchanges financial-account information automatically with a large number of partner jurisdictions. An account held abroad by a Swiss resident is exactly what gets reported, and an undeclared balance stays a problem for a long time: supplementary-tax proceedings reach back years.

Declaring a foreign savings account usually costs little: wealth tax on the balance, income tax on the interest. Not declaring it costs far more than was saved.

Does a flat abroad push you over the source-tax threshold?

If you are taxed at source (QuellensteuerQuellensteuerTax at source (withholding tax on salary)FRimpôt à la sourceITimposta alla fonteTax your employer deducts from each salary payment and pays to the canton for you. The rate is a cantonal average that assumes standard deductions, so it ignores your individual ones.Where you see itA deduction line on your monthly payslip, and a total on the salary certificate.Open in the glossary →) in Zurich, one of the triggers that forces you into a full return is wealth over CHF 80,000 (CHF 160,000 for a jointly taxed couple).

Confirm this one with your municipal tax office. Foreign property is declared but allocated abroad, and whether it counts toward a threshold expressed in taxable wealth depends on local practice. Guessing wrong means either an unnecessary filing or a missed obligation.

Everything else about the threshold is in Quellensteuer: should you file a return?.

Common mistakes

• Leaving a home-country savings account off the return. It is taxable here, it is reported to Switzerland anyway, and the tax on it is usually small compared with the cost of leaving it off.
• Assuming exempt means unmentioned. Foreign property is declared first and excluded from the taxed amount afterwards. Skipping the declaration is not the same as being exempt.
• Deducting a foreign mortgage in full. Debt and debt interest are apportioned to where the assets sit.
• Using one exchange rate for everything. Year-end for wealth, average for income.
• Forgetting a property you do not rent out. A notional rental value applies to a home you use yourself, abroad as in Switzerland.
• Treating an inheritance as income. Receiving it is generally not subject to income tax. What changes is your wealth from that point, and that is declared.

Common questions

Do I have to declare a bank account in my home country?

Yes. Swiss residents declare worldwide wealth: the 31 December balance as wealth, the interest as income. Switzerland also exchanges account information with many countries.

Is my flat abroad taxed in Switzerland?

No. The country it sits in has the taxing right. You still declare it, and it sets the rate applied to your Swiss income and wealth, so it can raise your Swiss tax without being taxed here.

Can I deduct my foreign mortgage?

Partly. Debts and debt interest are allocated in proportion to where your assets are located, so a mortgage on a property abroad is deductible in Switzerland only to the extent of the share attributed here.

Which exchange rate do I use?

The year-end rate for anything measured at 31 December, so balances, property values and securities. The average rate for income received across the year. ESTV publishes both on one page per tax year.

What about rent I receive from a property abroad?

Declared, not taxed in Switzerland, and used to determine your rate. The country where the property sits taxes the rent under its own rules.

I inherited money abroad. Is that income?

Receiving an inheritance is generally not subject to Swiss income tax. What changes is your wealth from the date you receive it, and that belongs on your return from that year onward.

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This article is general information, not tax, legal, or financial advice. Treatment of foreign assets depends on the treaty with the country concerned and on your personal circumstances. PaperTax helps you complete your own official cantonal tax return. It does not file on your behalf. For advice on your own situation, consult a qualified Swiss tax professional or your cantonal tax office.

Sources

Every figure in this guide is checked against these. Each link goes to the issuing document itself, not to a homepage or to somebody else's summary of it.

1. Federal direct tax act (DBG/LIFD) Art. 6 para. 1 — unlimited liability on worldwide income, which "does not extend to businesses, permanent establishments and real property abroad"; Art. 6 para. 3 — the international boundary follows the federal principles against intercantonal double taxation, which is where the proportional debt split comes from; Art. 7 para. 1 — tax "at the rate that corresponds to their total income", the exemption-with-progression rule — fedlex.admin.ch
2. Tax Harmonisation Act (StHG/LHID) Art. 13 para. 1 — the cantonal wealth tax applies to "total net assets", which is why a foreign bank account and a foreign mortgage both belong on the return — fedlex.admin.ch
3. ESTV — conversion rates for the 2025 tax period, carrying both the average selling rate for 1.1.2025–31.12.2025 and the selling rate at 31.12.2025 — estv.admin.ch
4. ESTV — the official securities and exchange-rate list (ICTax), the source Zurich names for foreign-currency conversion — estv.admin.ch
5. Canton Zurich — official guide to the 2025 return (form 305): declare all Swiss and foreign income and wealth even where the canton is not the only one taxing you and the office does the allocation (page 7); convert foreign-currency holdings at the ESTV rates as at 31.12.2025 (page 25); the debt-interest limit of gross private-property income plus CHF 50,000 (page 14) — zh.ch, PDF
6. Canton Zurich — persons taxed at source: the CHF 80,000 single / CHF 160,000 joint wealth threshold and the CHF 3,000 other-income threshold — zh.ch
7. Federal Council — decision of 1 April 2026 setting the abolition of the imputed rental value in force on 1 January 2029 — admin.ch
8. SIF — Swiss double taxation agreements — SIF, the State Secretariat for International Finance — sif.admin.ch
9. Canton Zurich — tax knowledge for natural persons — zh.ch

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