Nonresidents are subject to St. Gallen 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 St. Gallen, while foreign portfolios and movable property held abroad are not taxed in the canton.

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

1. Scope of Limited Tax Liability

A nonresident becomes liable for St. Gallen wealth tax if they hold any of the following:

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

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

2. Valuation Basis

St. Gallen applies cantonal valuation rules that are harmonised with federal law but implemented locally by the cantonal tax administration:

• Real estate: Cantonal tax value (Steuerwert), generally below open-market value and determined by the St. Gallen tax authority
• Securities and bank assets: Year-end tax value using official federal tax value lists and foreign exchange rates
• Business assets: Book or fair value according to Swiss accounting standards, with St. Gallen-specific adjustments where required
• Pension assets: Occupational and pillar 3a pension capital is typically exempt from wealth tax until payout

The Steuerwert for real estate reflects a fraction of market value, based on location, use, and property type, and is set by the St. Gallen tax administration. For more technical detail on valuation in this canton, see Valuation Rules.

3. Debt Allocation

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

• Mortgages secured on St. Gallen 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 St. Gallen 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
• Smaller technical exemptions required under harmonised cantonal law

For nonresidents, the effective St. Gallen wealth tax burden is driven mainly by the property’s tax value, the cantonal and communal tax scales, and debt allocation.

5. Double Tax Treaties

Under Switzerland’s double tax treaties, taxation of immovable property is typically assigned to the state in which the property is located. As a result, St. Gallen 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 St. Gallen 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 St. Gallen 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 St. Gallen 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 St. Gallen file a limited Swiss tax return covering Swiss-situs income and wealth. The wealth tax portion focuses on net taxable assets situated in St. Gallen as at 31 December.

• Official confirmation of the property’s tax value (Steuerwert)
• Mortgage and loan confirmations as of year-end
• Rental income and expense statements for let property
• Business balance sheet and asset schedules where a St. Gallen 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 Residential Property Owner

Profile: Resident of Germany, owns a residential property in the canton of St. Gallen.

• Tax value (Steuerwert): CHF 820,000
• Mortgage balance: CHF 520,000
• Combined cantonal/municipal multiplier (illustrative): 1.50 (150 % of simple tax)

Step 1 — Net taxable wealth: CHF 820,000 − CHF 520,000 = CHF 300,000
Step 2 — Simple wealth tax (illustrative progressive rate): 3.0‰ of CHF 300,000 = CHF 900
Step 3 — Applying multipliers: CHF 900 × 1.50 = CHF 1,350
→ Indicative effective burden of about 0.45 % of net taxable wealth (illustrative only; actual rates depend on year and commune).

9. Ending St. Gallen Tax Liability

Wealth tax liability in St. Gallen 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 St. Gallen 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 St. Gallen tax value and local multipliers before acquiring property.
• Align mortgage structure and debt allocation with your broader cross-border wealth and estate planning.
• Review how St. Gallen wealth tax interacts with home-country rules and relevant double tax treaties.
• Use a Swiss tax representative to manage filings, coordinate with your home-country advisor, and handle German-language correspondence.