Nonresidents are subject to Lucerne wealth tax on assets that are economically connected to the canton. In practice, this limited tax liability mainly concerns real estate and business assets located in Lucerne, while foreign portfolios and movable property held abroad are not taxed in the canton.

This guide summarises the scope, valuation rules, and compliance requirements for the 2025 tax year for nonresident individuals with assets in the canton of Lucerne.

1. Scope of Limited Tax Liability

A nonresident becomes liable for Lucerne wealth tax if they hold any of the following:

• Residential or commercial real estate situated in the canton of Lucerne
• Land or agricultural property located within the canton
• Permanent establishments or fixed places of business (e.g., workshops, offices, hotels, restaurants) in Lucerne
• Business assets allocated to a Lucerne branch or permanent establishment

Assets outside Switzerland — such as foreign securities, overseas real estate, and non-Swiss bank accounts — are excluded from the Lucerne wealth-tax base, though they may still be relevant in the country of residence for rate progression or reporting.

2. Valuation Basis

Lucerne applies cantonal valuation rules that are harmonised with federal law but implemented locally:

• Real estate: Cantonal tax value (Steuerwert) based on the cadastral value (Katasterwert). For self-occupied non-agricultural residential property at the tax residence, the Steuerwert is generally 75% of the cadastral value; for holiday homes and rented property, 100% of the cadastral value is used.
• Agricultural property: Taxed at agricultural income value (Ertragswert).
• Securities and bank assets: Year-end tax value based on official federal valuation lists and FX rates.
• Business assets: Book or fair value according to Swiss accounting standards.
• Pension assets: 2nd pillar and pillar 3a assets are generally exempt from wealth tax until payout.

For nonresident owners of Lucerne property (typically holiday or rental property), the Steuerwert will usually correspond to 100% of the cadastral value. For more technical detail within this canton, see Valuation Rules.

3. Debt Allocation

Debt allocation for nonresidents in Lucerne follows the Swiss principle of economic connection combined with proportional allocation:

• Mortgages secured on Lucerne property are deductible from the wealth-tax value of that property.
• Other debts are deductible only insofar as they can be economically tied to Swiss assets or allocated proportionally.
• If the taxpayer owns property in several Swiss cantons, total debt is allocated among cantons according to the relative taxable values of those assets.

Interest on debt is relevant for income tax and is apportioned across jurisdictions by reference to Swiss-sourced assets and income, including inter-cantonal allocation.

4. Allowances & Exemptions

Nonresident taxpayers in Lucerne generally do not benefit from the full range of personal allowances and social deductions granted to resident individuals. However, certain items are usually excluded from the wealth-tax base:

• Tax-exempt pension capital (2nd pillar and pillar 3a) until withdrawal
• Normal household goods and personal belongings (household contents are not subject to wealth tax)
• Other technical exemptions set out in Lucerne’s tax law and harmonised cantonal rules

For nonresidents, the effective Lucerne wealth tax burden is mainly driven by the property’s Steuerwert, the cantonal rate and municipal “tax units”, and debt allocation.

5. Double Tax Treaties

Under Switzerland’s double tax treaties, taxation of immovable property is typically assigned to the state where the property is located. As a result, Lucerne retains the right to tax real estate and related business premises situated in the canton, even when the owner is resident abroad.

Relief is usually provided in the country of residence through:

• Exemption with progression, or
• Foreign tax credit for Lucerne wealth tax against home-country wealth or property taxes.

It is important to check the specific treaty between Switzerland and your country of residence and to retain Lucerne tax assessments and receipts as proof of Swiss tax paid.

6. Swiss Tax Representative

Nonresidents will typically need to provide a Swiss correspondence address or appoint a tax representative when dealing with the Lucerne tax authorities.

• Swiss fiduciaries, tax advisors, or lawyers can act as authorised representatives.
• Official correspondence and assessments are issued in German.
• Using a representative helps manage deadlines, language issues, and any appeals or objections.

7. Filing & Compliance

Nonresident owners of property or business assets in Lucerne file a limited Swiss tax return covering Swiss-situs income and wealth. The wealth tax portion focuses on net taxable assets situated in Lucerne as at 31 December.

• Official confirmation of the property’s Steuerwert (and, where applicable, cadastral valuation)
• Mortgage and loan confirmations as of year-end
• Rental income and expense statements for let property
• Business balance sheet and asset schedules where a Lucerne permanent establishment exists

Filing deadlines broadly align with those for resident taxpayers. Extensions are generally available upon request, often submitted via a Swiss representative.

8. Example — Nonresident Holiday Home Owner

Profile: Resident of Germany, owns a holiday apartment in the canton of Lucerne.

• Cadastral value: CHF 900,000
• Usage: Holiday home (not primary residence)
• Steuerwert: 100% of cadastral value → CHF 900,000
• Mortgage balance: CHF 600,000
• Wealth tax base rate: 0.75‰ per tax unit
• Municipality factor (illustrative): 3.0 tax units

Step 1 — Net taxable wealth: CHF 900,000 − CHF 600,000 = CHF 300,000
Step 2 — Simple wealth tax: CHF 300,000 × 0.75‰ = CHF 225
Step 3 — Applying municipal tax units: CHF 225 × 3.0 = CHF 675
→ Indicative effective burden of around 0.23 % of net taxable wealth (illustrative only; actual municipal factors and values vary by commune and year).

9. Ending Lucerne Tax Liability

Wealth tax liability in Lucerne normally ends when the property or business assets in the canton are sold, transferred, or otherwise disposed of. A final limited tax return must be filed and any remaining wealth tax and property gains taxes settled.

The Lucerne tax office should be notified promptly of the disposal to avoid continued assessments based on outdated ownership data.

10. Planning Insights for Nonresidents

• Obtain an estimate of the Lucerne Steuerwert and local tax units before acquiring property.
• Align mortgage structure and debt allocation with your broader cross-border wealth and estate planning.
• Review how Lucerne’s proportional wealth tax interacts with home-country rules and any applicable double tax treaties.
• Use a Swiss tax representative to manage filings, coordinate with your home-country advisor, and handle German-language correspondence.