Grandma's silverware - Tax-free household goods or taxable asset?

Every year when filling out the tax return, the same question arises: the flatscreen or grandma's silver cutlery, are these items tax-free household effects or do they have to be taxed as assets? The answer to this question varies from canton to canton in Switzerland.

The possessions of a taxable person are divided into personal items, household effects, and capital investments (assets) in tax law. Personal items as well as household effects are not considered taxable items and therefore are not subject to wealth tax according to Art. 13 Para. 4 StHG.

What belongs to the tax-free household effects?

Personal items include all those things that are typically used by only one person. This includes items such as clothes as well as jewelry or the film camera of a hobby photographer. Household effects, on the other hand, include all items that belong to the usual furnishings of a house or an apartment. Furniture, carpets, paintings, dishes, the stereo system or the television are just a few possible items. Items clearly classified as capital investments i.e., taxable assets, include gold and other precious metals, securities, life insurances, motor vehicles, boats, riding horses, or valuable collections of any kind.

Distinction difficult

With certain items, the classification is difficult. These goods, which could belong to several tax categories, are called alternative goods. Grandma's silver cutlery, for example, can be part of the tax-free household effects if it is used regularly, or a taxable asset, if this is not the case. Another indicator for classification is the share the item represents of the total assets of the taxable person. The rule is: the larger the share, the more likely the item is to be classified as a capital investment. In some cantons, there is also a monetary limit beyond which an item is classified as a capital investment.

What do you need to tax?

If an item falls into the category of capital investments, it must be listed in the tax return with its insurance and market value. If the value is unknown, it must be appropriately estimated. In case of doubt, it is advisable to make a written enquiry with the responsible authority or consult a professional, as it is not worth evading taxes. If a non-declared asset is discovered by the tax authorities, a penalty and criminal tax procedure due to (attempted) tax evasion threatens.

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