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.
• A foreign mortgage is split by where your assets sit, not by which property secures it, and debt interest is deductible only up to your property income plus a further CHF 50,000.
• Use two exchange rates: the year-end rate for balances and values, the average rate for income received during the year. One convenient rate for everything is the common mistake.
• If you did not declare a foreign account in earlier years, do not simply add it now. Zurich treats that as an ordinary declaration rather than a self-disclosure, and the fine runs from one third to three times the back tax.

Declared, taxed, or rate-determining?

Three outcomes are possible. The table shows which applies to each kind of asset.

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

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

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" (DBGDBGThe federal income tax actFRLIFDBundesgesetz über die direkte Bundessteuer: the act that governs federal income tax for the whole country. Almost every federal rule a guide cites comes from here, which is why the abbreviation appears so often beside an article number.Where you see itIn citations, as DBG Art. 33 or similar. French and Italian sources call the same act LIFD.Open in the glossary → Art. 6 para. 1). The right to tax immovable property belongs to the country the property sits in, and Swiss treaties follow that consistently.

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.

A second limit sits on top, and it is federal, not cantonal, so it applies in every canton: 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 (DBG Art. 33 para. 1 lit. a). Zurich's own guide prints the same rule.

Which exchange rate?

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

The federal tax administration (ESTVESTVThe Federal Tax AdministrationFRAFCEidgenössische Steuerverwaltung: the federal tax authority. It publishes the forms, leaflets and price lists the cantons and your tax software work from, but it is not the office that assesses you: that is your canton.Where you see itNamed as the publisher on federal forms, leaflets and the Kursliste.Open in the glossary →) 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

Declaring a foreign savings account usually costs little: wealth tax on the balance, income tax on the interest.

If you did not declare it in earlier years, do not simply add it to this year's return. Canton Zurich is explicit: a declaration without an express reference to a self-disclosure does not count as one, and the fine then runs from one third to three times the back tax.

The route that avoids it is a voluntary disclosure (SelbstanzeigeSelbstanzeigeVoluntary disclosureFRdénonciation spontanée (non punissable)ITautodenuncia (esente da pena)Telling the tax office about undeclared income or wealth before it finds out. Done properly and once in a lifetime, it avoids a penalty, though the back tax and interest are still due.Where you see itA letter to the tax office, not a form field.Open in the glossary →), and you have to say plainly that this is what you are doing. The first one is penalty-free (DBG Art. 175 para. 3) if no tax authority already knows, you help establish the amount and you make a serious effort to pay. You still owe the back tax and interest. A later disclosure costs a fine of one fifth of the evaded tax.

A voluntary disclosure is a formal step with criminal-law consequences if it is made wrongly. Speak to a Swiss tax lawyer or your cantonal tax office before you write it, not after.

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.

Sources

The sources below support the tax figures and rules discussed in this guide. Follow the links to check the original guidance and its scope.

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, and its closing sentence puts foreign losses toward the rate only ("In allen übrigen Fällen sind Auslandsverluste ausschliesslich satzbestimmend zu berücksichtigen"); Art. 7 para. 1 — tax "at the rate that corresponds to their total income", the exemption-with-progression rule; Art. 33 para. 1 lit. a — the debt-interest cap of gross investment income plus CHF 50,000, which is federal and applies in every canton; Art. 152 — ten years to open back-tax proceedings, fifteen to set the amount; Art. 175 paras. 3 and 4 — the first voluntary disclosure is penalty-free, any later one is fined at a fifth of the evaded tax — fedlex.admin.ch
2. Tax Harmonisation Act (StHGStHGThe cantonal tax harmonisation actFRLHIDITLAIDSteuerharmonisierungsgesetz: the act that tells all 26 cantons which taxes they must levy and how the rules must be shaped. It sets the frame; each canton still fixes its own rates and many of its own deduction ceilings inside it.Where you see itIn citations as StHG Art. 13 or similar, usually beside the DBG article covering the same point federally.Open in the glossary →/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 — ictax.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. SIFSIFThe State Secretariat for International Financial MattersFRSFIStaatssekretariat für internationale Finanzfragen: the federal body responsible for Switzerland's double taxation agreements and for the automatic exchange of financial information with other countries.Where you see itNamed as the source for which double taxation agreement applies to a given country.Open in the glossary → — Swiss double taxation agreements — SIF, the State Secretariat for International Finance — sif.admin.ch
9. Canton Zurich — voluntary disclosure: a declaration made "without an express reference to the self-disclosure does not count as one and can lead to a penalty", and where the conditions are not met the fine runs "between one third and three times the back tax"; also the date the foreign-property loss rule applies from: "Ab der Steuerperiode 2021 werden die Verluste aus ausländischen Liegenschaften … nur noch satzbestimmend berücksichtigt" — zh.ch