Why Switzerland’s Inheritance Tax Initiative 2025 Threatens Economic Stability

On Nov 30, 2025 Switzerland votes on a 50% federal inheritance tax above CHF 50m. Here are the reasons why business leaders are against this initiative.

As the Founders of Luxcenture, a firm dedicated to guiding high-net-worth individuals and family businesses through complex financial landscapes, we have closely followed Switzerland’s evolving tax environment. The upcoming vote on November 30, 2025 on the “Inheritance Tax Initiative” (also known as the “Initiative for a Future”) could reshape Switzerland’s appeal as a global hub for wealth and innovation. This initiative driven by the Young Socialists (JUSO) aims to impose a hefty 50% federal tax on inheritances and gifts exceeding CHF 50 million to fund climate initiatives. While the intent to address climate change is noble, the mechanism is deeply flawed and could inflict lasting damage on Switzerland’s economy. In this articel we will break down what the initiative entails, the current tax landscape, potential consequences if it passes, the government’s stance, and the latest polls. As a firm advising clients on preserving and growing generational wealth, we strongly oppose this initiative – it’s a shortsighted policy that risks driving away talent, capital, and jobs.

What Does the Swiss Inheritance Tax Initiative Propose?

The initiative, formally titled “For a Social Climate Policy – Fairly Financed Through Taxes (Initiative for a Future),” seeks to introduce a new federal-level inheritance and gift tax. Key elements include:

• A flat 50% tax rate on estates and gifts above CHF 50 million, applied immediately upon approval.
• Revenue earmarked for “socially just” climate measures, with estimates from proponents suggesting annual inflows of around CHF 6 billion.
• No exemptions for family business successions, charitable donations, or other common reliefs, potentially leading to double taxation alongside existing cantonal taxes.
• A provision for exit taxation to prevent tax avoidance through relocation, though the Federal Council has clarified this couldn’t be implemented until enabling legislation is passed (up to three years post-vote).
  
  

Proponents argue this targets only about 2,000 ultra-wealthy individuals, funding essential economic transitions without burdening the average Swiss citizen. However, critics—and we include ouryselves here—see it as an overreach that ignores broader economic ripple effects.

The Current Inheritance Tax Situation in Switzerland

Switzerland currently has no federal inheritance or gift tax; these are handled exclusively at the cantonal level, reflecting the country’s federalist structure. This decentralized approach has long been a cornerstone of Swiss fiscal autonomy and attractiveness to international residents.

• Tax rates vary widely by canton: For direct descendants (spouses and children), many cantons like Schwyz, Obwalden, and Nidwalden impose no inheritance tax at all. Others, such as Vaud or Geneva, have progressive rates up to 49.5% for larger estates, but exemptions and deductions often keep effective burdens low.
• For non-direct heirs or unrelated beneficiaries, rates can be higher, but overall, Switzerland’s system is competitive globally, with no double taxation at the federal level.
• Wealthy individuals already contribute significantly through progressive income and wealth taxes, which fund public services including climate efforts.
  
  

This setup has helped position Switzerland as a top destination for high-net-worth immigrants, fostering economic growth without punitive estate taxes. Introducing a national 50% levy would disrupt this balance, potentially leading to near-confiscatory taxation when combined with cantonal rates (up to nearly 100% in extreme cases).

What Happens if the Initiative Passes? Key Impacts and Risks

If approved, the inheritance tax initiative could have far-reaching negative consequences, undermining Switzerland’s status as a wealth-friendly nation. Drawing from PwC surveys and expert analyses, here’s a breakdown:

Impact on Switzerland’s Attractiveness as a Relocation Destination

Switzerland has historically drawn wealthy individuals due to its stability, infrastructure, and favorable taxes. However, the initiative’s mere proposal has already caused uncertainty. A PwC survey of tax advisors, lawyers, and professionals revealed:

• 84% believe the initiative damages Switzerland’s reputation, leading potential immigrants to choose alternatives like Italy (37%), the UAE (29%), or Monaco (14%).
• 57% of respondents have been involved in projects where clients considered Switzerland but opted elsewhere, primarily for tax reasons (76%).
• Estimated lost taxable wealth: Over CHF 10 billion in some assessments, with annual income losses exceeding CHF 1 billion.
  
  

This “pre-emptive effect” has resulted in capital outflows, reducing tax revenues and economic activity. As Founders of Luxcenture advising on relocations, we have seen clients pivot to jurisdictions like Italy’s flat-tax regime, fearing retrospective application and legal ambiguities.

Taxation of Businesses and Succession Challenges

Family-owned businesses, the backbone of Switzerland’s economy, face existential threats:

• 96% of 224 surveyed family entrepreneurs reject the initiative.
• 80% lack sufficient liquid assets to pay the tax, forcing sales, loans, or fragmentation of companies.
• 66% predict their businesses wouldn’t remain fully in family hands during succession, jeopardizing jobs and innovation.
• 78% are already exploring relocations or early asset transfers.
  
  

Without exemptions for business successions, this could erode Switzerland’s entrepreneurial ecosystem, leading to job losses and reduced competitiveness. Economists warn it would stifle innovation and harm SMEs, which drive much of the nation’s GDP.

Taxation of Real Estate and Broader Consequences

Real estate taxation adds another layer of complexity:

• Cantons retain rights over Swiss-based properties, but the federal tax could create double burdens.
• Unclear treatment for foreign-owned Swiss properties or assets held abroad by Swiss residents, risking international disputes and multiple taxations.
• Potential for confiscatory effects: Combined rates could approach 100%, discouraging investments in Swiss real estate.
  
  

Additionally, charitable institutions could suffer, as 50% of bequests might go to the state instead of nonprofits. Ongoing lifetime donations might count toward the CHF 50 million threshold, curbing philanthropy. Overall, the initiative risks more revenue losses from outflows than gains from the tax itself, as noted in Federal Council estimates where up to 98% of taxable assets could evade the levy through relocations.

The Swiss Government’s and Federal Council’s Stance

The Federal Council, in its December 13, 2024, message, unequivocally recommends rejecting the initiative. Key arguments include:

• It infringes on cantonal fiscal autonomy, centralizing power at the federal level.
• Incompatible with Switzerland’s polluter-pays climate policy; the country is already committed to net-zero by 2050 via targeted measures.
• Likely to generate far less revenue than projected due to mass relocations, harming public finances.
• Switzerland already taxes wealth progressively, with high earners funding climate efforts.
  
  

Both the National Council and Council of States have rejected it, emphasizing risks to economic attractiveness and legal uncertainties like retroactive application. This unified opposition underscores the initiative’s misalignment with Swiss values of federalism and prudence.

Chances of Approval: Latest Poll Results and Outlook

The initiative’s approval chances appear slim, with polls consistently showing strong opposition. Recent surveys as of November 2025 indicate:

• 67% rejection rate (bluewin.ch poll, October 2025).
• 73% against in June-July 2025 polls (RSM Global).
• Clear “no” in SSR/Sotomo’s first vote poll ( swissinfo.ch, October 2025), with two-thirds doubting its effectiveness.
• Bloomberg poll (October 2025): Lacks broad support, especially amid concerns over economic damage.
  
  

Voter turnout and late shifts could influence outcomes, but current trends suggest a decisive defeat. Public sentiment prioritizes economic stability over this punitive tax, aligning with arguments that it burdens the middle class indirectly through lost growth.

Luxcenture’s stance

As a company that partners with founders, family enterprises and global innovators, Luxcenture believes this initiative would:

• Jeopardize family-business continuity and Swiss jobs by forcing liquidity events at the worst possible moment.

• Erode Switzerland’s relocation appeal precisely when mobile talent is reassessing Europe. 

• Complicate real-estate succession and amplify cross-border disputes.

• Deliver less revenue than advertised while adding bureaucracy and legal ambiguity. 

A decisive No will protect Swiss entrepreneurship, preserve cantonal tax autonomy, and keep Switzerland open, competitive and predictable. In conclusion, the Swiss inheritance tax initiative 2025 is a misguided proposal that could unravel decades of economic success. It threatens family businesses, deters international talent, and risks fiscal shortfalls – all while failing to effectively fund climate goals. 

FAQ (for founders & family offices)

Will my heirs owe federal tax immediately if the initiative passes?
Yes—estates and gifts dated from approval day would be in scope; exit tax could not apply until the law is enacted. 

How would this interact with my canton’s rules?
It would be on top of cantonal inheritance/gift taxes, raising both effective rates and complexity. 

What about business succession?
Illiquid shareholdings + a 50% federal levy (plus canton) = liquidity crunch and risk of forced sales – as flagged by Swiss family firms in recent surveys.

Could Switzerland lose attractiveness for relocations?
Evidence already points to deferred/deterred moves and alternative destinations (Italy, Monaco, UAE) are being considered.