Swiss Voters Reject Proposal for 50% Inheritance Tax

[right]Photo: Pxhere

Swiss voters have rejected a proposal to introduce a 50% inheritance and gift tax on assets valued above CHF 50 million (€5.5 million). According to the final referendum results, 78% voted against the initiative, and not a single canton supported it. Voter turnout reached approximately 43%, Imidaily
reports.

Reform and Reaction

The initiative was promoted by the youth wing of the Social Democratic Party, whose authors aimed to channel additional tax revenue into climate programmes and reduce concentration of ultra-large fortunes. The measure was expected to affect only 0.03% of the population — around 2,000–2,500 individuals.

Switzerland’s federal government and most major parties opposed the proposal, citing risks of capital outflow and a shrinking tax base. Finance Minister Karin Keller-Sutter described the initiative as “a dangerous experiment” that could destabilise the tax system and undermine Switzerland’s attractiveness for wealthy residents.

The business community reacted negatively as well. Economiesuisse, the country’s leading business federation, called the proposal “excessive and harmful,” stressing that high taxation could pressure heirs of family businesses into selling assets simply to meet tax obligations. After the plan was announced in April 2025, several entrepreneurs — including billionaire Peter Spuhler — publicly stated they might consider leaving Switzerland if the law were enacted.

The referendum outcome reflects Switzerland’s long-standing tradition of rejecting sharp tax increases. Voters have previously dismissed proposals to significantly raise taxes on high incomes, abolish the preferential lump-sum taxation regime for wealthy foreign residents (forfait fiscal), impose caps on executive salaries, extend mandatory paid holidays, and introduce a national minimum wage.

For decades, Switzerland has attracted a substantial share of global capital thanks to its combination of cantonal wealth taxes and favourable regimes for specific categories of foreigners. Supporters of the existing system argue that a dramatic tax hike would weaken Switzerland’s competitiveness and reduce budget revenues.

Price Dynamics

According to Julius Baer’s report for Q4 2025, the price gap between major metropolitan areas and the rest of the country continues to widen. In Zurich, Geneva, and Lausanne, the average price of apartments exceeds CHF 14,000–16,000 per sq. m (€14,300–16,400). In several cantons outside the largest centres, prices range from CHF 7,000 to 9,000 (€7,200–9,250).

A persistent shortage of high-quality housing in major cities keeps the price base elevated. As a result, investors seeking to diversify are increasingly turning to more affordable residential projects in secondary regions.

Survey data from KPMG shows that nearly all respondents — 94% — expect further residential price growth. In contrast, the office and traditional retail segments display cautious or negative outlooks. Logistics and specialised assets, including data centres, maintain moderately positive expectations.

The overall Swiss Real Estate Sentiment Index rose to 69.5 points in 2025 — the highest level since monitoring began.

Investment and Yields

According to UBS Asset Management, investment activity in Switzerland continues to grow. From January to May 2025, total capital inflow into the real estate sector exceeded CHF 1.8 billion (€1.84 billion).

In the summer of 2025, the Swiss National Bank (SNB) reduced the key policy rate to 0%, further increasing the market’s attractiveness. Mortgage rates, however, remained between 1.3% and 1.8%, depending on product and term. The reference rate used for rent adjustment stands at 1.25%.

Still, investors cannot expect high yields from Swiss residential real estate. Global Property Guide and Immoscout24 report that in Q3 2025, the average gross rental yield amounted to just 2.92%, while the net yield typically runs 1.5–2 percentage points lower, often not exceeding 1%.

Yields across cantons follow a similar pattern:
Zurich — 2.41% (0.41% net),
Geneva — 2.55% (0.55%),
Bern — 2.98% (0.98%),
Vaud — 2.92% (0.92%),
Ticino — 2.78% (0.78%),
Valais — 3.59% (1.59%),
Aargau — 2.87% (0.87%),
Fribourg — 3.28% (1.28%).

Analysts at International Investment note that residential purchases in Switzerland are primarily aimed at preserving, not multiplying, capital. Prestige and stability remain essential factors for wealthy buyers. For yield-driven investors, other markets and asset classes are more attractive — for example, luxury branded hotel projects in Georgia offer returns starting at 10%, with potential yields reaching 19%.