Wealth Tax Across Europe: Why Luxembourg Abolished It for Individuals

Wealth tax is one of the most divisive levies in Europe. Some countries tax the stock of net assets every year; most have abandoned the idea as hard to administer and easy to avoid. Luxembourg sits firmly in the second camp for individuals, while keeping a net-wealth tax on companies. This comparison of wealth tax across Europe explains where the Grand Duchy stands in 2026 and how neighbours such as Spain, France and Switzerland differ.

> This is general information, not tax advice. Cross-border wealth planning is highly personal; take professional advice.

What a wealth tax actually is

A wealth tax is charged on the *net value of what you own* (assets minus debts) at a valuation date, regardless of whether those assets produced income. That makes it fundamentally different from income tax or capital gains tax, which fall on flows rather than the underlying stock. Because it can bite even when an asset generates no cash, wealth tax is controversial and has been repealed in most of Europe.

Luxembourg: abolished for individuals, retained for companies

Luxembourg abolished the personal net-wealth tax for individuals in 2006. Residents no longer pay any annual tax on their net worth: property, portfolios, savings and business interests are outside the wealth-tax net at the individual level.

However, the net-wealth tax (impôt sur la fortune, NWT) still applies to companies. Corporate entities pay an annual NWT of broadly 0.5% on their net asset value, with a reduced 0.05% rate on the portion above a high threshold, and a minimum NWT that depends on the balance-sheet structure (for example, holding-type balance sheets with mainly financial assets face a fixed minimum). This corporate NWT is a familiar feature of Luxembourg's holding and fund landscape, but it does not touch private individuals.

The practical takeaway: an individual resident in Luxembourg faces income tax and, in limited cases, capital gains tax, but no personal wealth tax.

How neighbours compare

Spain Spain levies a regional **impuesto sobre el patrimonio** on worldwide net wealth for residents above a threshold (commonly around €700,000, plus a main-home allowance), with progressive rates that can exceed 3% in some regions. Some regions grant a near-total rebate, while a separate **solidarity tax on large fortunes** targets net wealth above roughly €3 million nationally.

France France abolished its broad wealth tax (ISF) in 2018 and replaced it with the **impôt sur la fortune immobilière (IFI)**, a tax on net *real-estate* wealth above €1.3 million. Financial portfolios are excluded, so the French system now taxes property wealth only.

Switzerland Switzerland retains a genuine annual **wealth tax levied by cantons and municipalities** on worldwide net assets. Rates are modest and vary widely by canton, typically a fraction of a percent, but the tax applies from relatively low thresholds and is a normal part of Swiss taxation.

Country comparison

Worked example

Take a resident with €2 million of net wealth: a €1.2 million home, €600,000 in investments and €200,000 cash.

• In Luxembourg, the annual personal wealth-tax bill is €0 — the individual regime imposes none.
• In France, only the real estate counts for IFI; €1.2 million is below the €1.3 million threshold, so the bill is likely €0 as well, though the calculation is property-only.
• In Switzerland, a canton applying roughly 0.3% would levy about €6,000 per year on the full €2 million.
• In Spain, depending on the region and rebates, the same net wealth could face a four- or five-figure annual charge.

The same balance sheet therefore produces very different annual costs purely because of where you are resident. To see how residence changes your overall take-home position, compare scenarios with the tool below.

👉 Compare take-home pay across countries

Frequently Asked Questions

Does Luxembourg tax my worldwide assets at all? Not as a wealth tax. Individuals pay income tax on income and, within narrow rules, tax on certain capital gains, but there is no annual levy on the value of your net assets since the 2006 abolition.

Why do Luxembourg companies still pay net-wealth tax? The corporate NWT is a long-standing feature of the company tax system, including a minimum charge tied to the balance sheet. It affects legal entities such as holdings and funds, not the personal wealth of resident individuals.

If I move to Luxembourg from Spain, do I escape wealth tax? Becoming a Luxembourg tax resident generally removes exposure to a personal wealth tax, but Spain may still tax Spanish-situated assets of non-residents, and exit rules can apply. Plan any relocation carefully with an adviser.