Tax season in Switzerland: Tips, deductions & what you need to know

Wealth management fees can be deducted

Did you know that administrative costs and management fees for your investments are tax-deductible? Whether you're paying fees to a bank, a broker, or an investment service like Selma, you can enter these costs under "Kosten für die Verwaltung des beweglichen Privatvermögens" (loosely translated as "Costs of managing liquid private assets") in your Steuererklärung.

Real estate taxes: What to consider 

If you own real estate in Switzerland, it plays a role in your tax obligations. Here are some key points to keep in mind:

• Maintenance costs are deductible: Any expenses for maintaining your home, such as roof repairs or heating system upgrades, can be deducted.
• Mortgage interest is tax deductible: This can significantly reduce your taxable income.
• Eigenmietwert reduction: If you have unused rooms because your children have moved out, you may request a reduction in Eigenmietwert. However, once granted, you cannot use the space for anything, not even storage.
• Selling property? Beware of Grundstückgewinnsteuer: When selling real estate, you must pay a capital gains tax (Grundstückgewinnsteuer), which decreases the longer you have owned the property. If you're close to a full-year milestone, delaying the sale could save you money.

Tax laws can vary by canton. For example, Zürich, Bern, and Luzern have different rules regarding Grundstückgewinnsteuer — so it's always good to check your local regulations!

Additional tax deductions you should know about

There are tax deductions that a lot of people like to oversee but should keep an eye on. 

Medical expenses

While most medical expenses are covered by health insurance, certain high costs — like expensive dental treatments — can sometimes be deducted. Be sure to check your canton’s regulations.

Energy-saving home improvements

Upgrading to a modern heating system, installing double-glazed windows, or improving insulation? In many cases, these costs can be deducted as part of maintenance expenses. Cantonal regulations vary, so check the rules in Zürich, Bern, or Luzern if you're planning renovations.

Maximising your Pillar 3a tax benefits

Contributions to your Pillar 3a account are tax-deductible — a great way to reduce your tax bill while saving for retirement.

Why invest in Pillar 3a?

• Tax-free growth: You don't pay income or interest taxes on money invested in Pillar 3a.
• Long-term benefits: The longer your investment horizon, the greater the compounding effect.
• Flexible use: When you retire, you can use the funds for major life goals, such as buying a home or traveling the world.

Capital withdrawal tax in Swiss cantons

When withdrawing money from your Pillar 3a or occupational pension fund (2nd pillar), you’ll pay a capital withdrawal tax. This tax is lower than regular income tax and is calculated separately. However, the exact amount varies depending on your canton, municipality, and whether you belong to a religious denomination (as church tax may apply).

Example tax rates for a CHF 250’000 withdrawal:

• Zürich: Approx. 5.9%
• Bern: Around 6.6%
• Luzern: Estimated 7.0%

A full comparison of cantonal withdrawal taxes can be found on federal tax resources or tax advisory platforms.

How to reduce capital withdrawal tax

• Stagger withdrawals over multiple years

If you withdraw all your pension assets in a single year, you’ll pay more tax. Instead, spread withdrawals over several years to reduce the overall tax burden.

• Use multiple Pillar 3a accounts

If you have several Pillar 3a accounts, withdraw them in different years to keep tax rates lower.

• Repay WEF withdrawals

If you previously withdrew Pillar 2 or 3a funds to buy a home (WEF withdrawal), you can repay them and reclaim the capital withdrawal tax paid — provided you act within three years.

Your tax report at Selma

If you are a client you will receive a tax report once a year. This report shows you all details about your investments and helps you when filling in your tax statement. As soon as the various ETFs that you are invested in have reported the annual return data to the authorities, Selma can generate your tax report.

This happens typically in the beginning of March and you will get notified by email, once everything is available in your Selma web app. 

For your pillar 3a account you will get the tax confirmation in January from our partner VZ via mail (like - actual mail, not email). Of course, you can also download your pillar 3a payment confirmation from your Selma account.

Want to know more about your tax report? Check out our FAQ.

Final tips for a stress-free tax season

1. Keep track of all deductible expenses throughout the year.
2. Optimise withdrawals from your pension assets to reduce taxes.
3. Take advantage of tax-friendly savings options like Pillar 3a.
4. Use your Selma tax report for easy filing.

With a little preparation, tax season doesn’t have to be overwhelming. Need more guidance? Check out our FAQs or contact the Selma Support.