Wealth Taxes in Europe: Norway, Spain, Switzerland, France, and Offshore Planning Strategies

The European Wealth Tax Landscape

Wealth taxes — annual charges on net wealth (total assets minus liabilities) — have been abolished in most OECD countries over the past three decades. Germany abolished its Vermögensteuer in 1997 (after the Constitutional Court ruled it was incompatible with the Basic Law's proportionality principle). Sweden abolished its förmögenhetsskatt in 2007. France abolished its ISF (impôt sur la fortune) in 2017 (replacing it with the narrower IFI on real estate only).

Despite this trend, several European countries maintain active wealth taxes, and political pressure for their reintroduction in abolished jurisdictions remains significant.

Norway: Formuesskatt (Wealth Tax)

Norway levies the formuesskatt — wealth tax — on individuals' net wealth above a threshold. The current structure (2025):

Net Wealth Band	Municipal Rate	National Rate	Total
Up to NOK 1,700,000	0%	0%	0%
NOK 1,700,001 – NOK 20,000,000	0.7%	0.3%	1.0%
Above NOK 20,000,000	0.7%	0.4%	1.1%

The NOK 1.7 million threshold (approximately €150,000 at current exchange rates) is relatively low — most Norwegian homeowners are within the wealth tax net.

A particularly contentious feature of Norwegian wealth tax is the treatment of unlisted shares. Unlisted shares were previously valued at a substantial discount to their market value for wealth tax purposes. From 2022, the discount has been progressively reduced, and from 2025 unlisted shares are valued at 100% of estimated market value. For shareholders in successful unlisted Norwegian companies, this means the wealth tax is calculated on the full unrealised value of their stake — potentially creating a liquidity problem where the wealth tax on paper wealth exceeds cash available.

Several high-profile Norwegian entrepreneurs emigrated to Switzerland in 2022-2023 to escape the wealth tax — notably Johan Andresen (Ferd AS) and Kjell Inge Røkke. Norway has responded by introducing an "emigration wealth tax" — a 1% charge for three years after departure for individuals who were Norwegian tax resident for at least 12 of the preceding 16 years.

Spain: Impuesto sobre el Patrimonio

Spain's wealth tax (Impuesto sobre el Patrimonio) was reintroduced as a "temporary" measure in 2011 and has been extended annually since. The national rate structure:

Net Wealth Band	National Rate
Up to €167,129	0.2%
€167,129 – €334,253	0.3%
€334,253 – €668,500	0.5%
€668,500 – €1,336,999	0.9%
€1,337,000 – €2,673,999	1.3%
€2,674,000 – €5,347,998	1.7%
€5,347,998 – €10,695,996	2.1%
Above €10,695,996	3.5%

Autonomous communities (regions) can modify these rates significantly. Madrid applies a 100% bonification (rebate), effectively making wealth tax 0% for Madrid residents. Catalonia applies rates above the national scale, making it one of the most expensive regions.

The basic exemption for Spanish residents is €700,000, plus an additional exemption for the main residence of up to €300,000 (total: €1 million effectively exempt).

Spain's wealth tax applies to both residents (on worldwide net wealth) and non-residents (on Spanish-situated assets). A non-resident UK national who owns a villa in Marbella valued at €800,000 (with no mortgage) is subject to Spanish wealth tax on the excess above €700,000 — €100,000 at 0.2% = €200 per year, a modest amount. At higher values, the charge increases materially.

The Solidarity Tax (New from 2022)

From 2022, Spain introduced a new "Solidarity Tax on Large Fortunes" (Impuesto Temporal de Solidaridad de las Grandes Fortunas) on net wealth above €3 million:

Net Wealth	Solidarity Tax Rate
€3,000,001 – €5,000,000	1.7%
€5,000,001 – €10,000,000	2.1%
Above €10,000,000	3.5%

This applies at the national level and can interact with (but not double the total charge beyond) the regional wealth tax rates. Madrid residents who previously paid 0% wealth tax due to the Madrid bonification are now subject to the Solidarity Tax on wealth above €3 million.

Switzerland: Cantonal Wealth Taxes

Switzerland does not have a federal wealth tax, but all 26 cantons levy cantonal and communal wealth taxes on individuals' net assets. The rates vary substantially by canton:

Canton	Approximate Wealth Tax Rate on CHF 2M
Zug	~0.13%
Schwyz	~0.17%
Nidwalden	~0.18%
Geneva	~0.55%
Bern	~0.65%
Vaud	~0.71%

Switzerland's wealth tax is charged on worldwide net assets of Swiss residents. Assets include: financial investments, real estate (at official values, often below market), business interests, and pension assets above a threshold.

The low rates in tax-efficient Swiss cantons (Zug, Schwyz, Nidwalden) mean that a UHNWI with CHF 50 million of net assets pays approximately CHF 65,000-100,000 per year in wealth tax. Combined with relatively low income tax rates in these cantons, Switzerland remains a competitive jurisdiction for wealth accumulation despite the wealth tax.

France: IFI (Impôt sur la Fortune Immobilière)

France replaced its broader ISF wealth tax with the narrower Impôt sur la Fortune Immobilière (IFI) from 1 January 2018. The IFI applies only to real estate assets:

Net Real Estate Assets	IFI Rate
Up to €800,000	0% (below threshold)
€800,001 – €1,300,000	0.5%
€1,300,001 – €2,570,000	0.7%
€2,570,001 – €5,000,000	1.0%
€5,000,001 – €10,000,000	1.25%
Above €10,000,000	1.5%

IFI applies to French residents on worldwide real estate assets (above €1.3 million threshold), and to non-residents on French-sited real estate (above the same threshold). Financial assets — shares, bonds, funds — are not within IFI, which significantly reduces the scope compared to the former ISF.

The IFI creates particular planning considerations for offshore holding company structures: holding French real estate through a company does not automatically take it outside the IFI. A French-resident individual who holds French real estate through a company is subject to IFI on the real estate component of the company's assets, pro-rated to their shareholding.

Offshore Planning Strategies

Offshore Holding Company Structures

Holding real estate through an offshore company can reduce or eliminate wealth tax exposure in some jurisdictions:

• Norway: Offshore holding of non-Norwegian assets — since unlisted shares are now at 100% value, this provides limited additional shelter
• Spain: Non-residents are taxed only on Spanish assets. An offshore holding company owning Spanish real estate may reduce Spanish wealth tax to the extent Spain's domestic rules do not look through the offshore structure
• France (IFI): France looks through offshore companies for IFI purposes (under Article 965 CGI) for assets above a threshold. Holding French real estate through a Cayman company does not shelter it from IFI for a French-resident individual

Treaty Protection

Wealth tax treaties are relatively rare but exist. The France-Switzerland DTA includes provisions on the former ISF (now IFI). The Spain-France DTA covers Spain's wealth tax. US tax treaties generally do not cover wealth taxes.

For individuals in high-wealth-tax jurisdictions, establishing residence in a no-wealth-tax jurisdiction is the most effective mitigation strategy. The UAE, Singapore, and the UK (post-non-dom reform, no wealth tax) are common destination jurisdictions for individuals departing Norway and Spain.

HPT Group advises individuals with multi-jurisdictional wealth on European wealth tax exposure, residency transition planning, and the structuring of offshore assets to minimise aggregate wealth tax costs across jurisdictions. For a cross-border wealth tax review, contact our international private wealth team or apply for a consultation.