Wealth Tax
A recurring tax on an individual's total net assets above a threshold, assessed annually regardless of whether any gain was actually realized.
A wealth tax is a recurring tax assessed on an individual's total net assets (potentially including crypto holdings) above a specified threshold, generally charged annually regardless of whether any of those assets were actually sold or any gain was realized during the year.
This is a structurally different concept from capital gains tax, which taxes a realized gain at the point of disposal — a wealth tax instead taxes the ongoing value of holdings themselves, year after year, whether or not anything was sold. A relatively small number of jurisdictions currently apply a wealth tax; check the relevant country-specific guide in Kaavon's crypto tax section for whether one applies there.
Examples
- A wealth tax can apply to unsold crypto holdings purely based on their year-end value, unlike capital gains tax, which only applies when an asset is actually sold.
- Wealth tax and capital gains tax are structurally different taxes that can both apply to the same crypto holdings in a jurisdiction that imposes both.