In Lucerne, wealth tax is levied on a taxpayer’s net wealth (Reinvermögen): total worldwide assets minus deductible liabilities and cantonal allowances. The resulting taxable net wealth is then taxed at a progressive wealth tax scale, multiplied by the municipal tax multipliers.

This overview follows the framework of the Steuergesetz des Kantons Luzern (StG LU) and the practice of the Steuerverwaltung des Kantons Luzern as set out in the official Wegleitung zur Steuererklärung and annual tax parameter sheets.

Personal Allowances

Lucerne grants basic tax-free amounts on wealth that reduce the taxable net wealth base. The size of the allowance depends on the taxpayer’s family situation as at 31 December of the tax year.

Exact CHF amounts for these allowances are defined each year in Lucerne’s tax parameter sheet (Steuerfüsse und Tarife, section Vermögenssteuer). When preparing a return, always refer to the official tables for the relevant tax period.

Debt Deductions

Lucerne taxes net wealth, meaning that legally enforceable, clearly documented liabilities outstanding at 31 December can be deducted from the gross asset base. Common deductible debts include:

• Mortgage balances on Swiss and foreign real estate held privately
• Bank loans, investment credit lines and margin loans
• Private loans with written agreements and interest documentation
• Outstanding federal, cantonal and communal tax liabilities

Debts denominated in foreign currencies must be converted into CHF using the official year-end exchange rates recognised by the tax authorities (generally those published by the Federal Tax Administration).

Contingent or informal obligations (such as guarantees, sureties or letters of comfort) are not deductible until they crystallise into an actual, enforceable liability.

Pension Assets & Retirement Accounts

As in other Swiss cantons, Lucerne treats certain retirement assets as exempt from wealth tax while they remain within recognised pension vehicles:

• Occupational pension assets in Swiss 2^nd pillar schemes (berufliche Vorsorge / BVG) are excluded from taxable wealth until benefits are paid out.
• Tied individual retirement accounts (pillar 3a) are likewise not subject to wealth tax.

Ordinary savings and investment products (pillar 3b) remain fully taxable.

Pension buy-ins and pillar 3a contributions primarily reduce income tax; for wealth tax, they matter to the extent that assets move from taxable private accounts into exempt pension plans.

Valuation Adjustments

Under the Lucerne tax code and practice, assets are generally valued at market value (Verkehrswert) as at 31 December, with specific rules for certain categories that can reduce taxable wealth versus simple market prices:

• Household effects: normal household goods and personal items of daily use (Hausrat und persönliche Gebrauchsgegenstände) are exempt from wealth tax.
• Securities and funds: listed securities are valued at their official year-end prices; for many collective investments and structured products, the tax authorities publish specific taxable values.
• Unlisted business interests: participations in non-listed companies are usually valued using income- and asset-based methods in line with Swiss tax conference practice; the resulting taxable value is often below book equity.
• Real estate: private property is valued at tax value (steuerlicher Wert) according to Lucerne’s rules, which often lies below open-market value; separate rules may apply for agricultural property.
• Life and annuity policies: policies with a surrender value are taxable at that value; non-surrenderable claims are generally not included in the wealth tax base.
• Cryptocurrencies and digital assets: typically valued at the official year-end prices published by the Federal Tax Administration.

Marital Property & Family Context

Married couples living in an undissolved marriage are generally taxed jointly in Lucerne. Their income and wealth are aggregated irrespective of the matrimonial property regime, and the joint wealth allowance and relevant brackets apply to their combined net wealth.

The assets of minor children under parental authority are usually attributed to the parents’ wealth tax return. This attribution drives the application of child-related allowances and can influence the progression within the wealth tax scale.

Gifts, inheritances and other extraordinary inflows are included in taxable wealth as at 31 December, unless they qualify for specific exemptions (for example, certain pension or insurance benefits). Separate cantonal rules govern inheritance and gift tax and should be considered alongside wealth tax planning.

Documentation & Compliance

The Lucerne tax administration expects clear, consistent documentation for assets and liabilities declared for wealth tax, typically including:

• Year-end bank and custody statements for cash, securities and fund holdings
• Mortgage and loan balance confirmations as at 31 December
• Written contracts and interest statements for private loans
• Pension fund statements (2^nd pillar) and pillar 3a account overviews
• Valuation notices or tax values for real estate and significant private participations

Ensuring that figures in the income tax and wealth tax sections of the return reconcile (for example for portfolios or rental properties) helps avoid follow-up questions and assessment adjustments.

Planning Insights

• With a progressive wealth tax scale and varying municipal multipliers, carefully managing net wealth as at 31 December can deliver recurring savings, especially at higher asset levels.
• Mortgages and investment loans can be used to reduce taxable net wealth, but interest expenses reduce overall after-tax returns and impact income tax. Any debt strategy should be evaluated across both income and wealth taxes.
• Concentrated holdings of low-yield or non-productive assets (excess cash, collectibles) above the allowance thresholds can increase wealth tax without improving income. Reallocating into diversified portfolios or tax-efficient pension vehicles may improve both risk/return and long-term tax outcomes.
• Business owners should review the valuation of private participations and ensure that recognised practice methods are applied; the chosen valuation approach can significantly influence taxable wealth.
• Intra-family planning (gifts, loans, early transfers of real estate or businesses) can shift wealth tax exposure between generations. Only properly documented arrangements are recognised and these may also trigger inheritance or gift tax in Lucerne.