Switzerland is not only known for its breathtaking landscapes and stable economic conditions but also for its attractive real estate market. However, foreign nationals looking to purchase property in Switzerland quickly encounter the so-called Lex Koller. This federal law regulates the acquisition of property by foreign nationals and has a clear purpose: to protect the domestic real estate market.
The law, officially known as the "Federal Act on the Acquisition of Real Estate by Persons Abroad," is named after Swiss Federal Councilor Arnold Koller. Since 1983, it has formed the basis for foreign nationals' property acquisitions in Switzerland and has been adjusted several times. The primary goal is to protect the Swiss real estate market from artificial price increases that could result from high demand from abroad.
According to Lex Koller, the following groups are considered "persons abroad" and are subject to its regulations:
A permit from the relevant cantonal authority is required for the acquisition of property unless exceptions apply, which are explained below.
EU/EFTA nationals and citizens from other countries with a valid C residence permit who reside in Switzerland may purchase property without restrictions. They can acquire all types of property, including multi-family homes and second homes, without a permit.
Third-country nationals (non-EU/EFTA citizens) with a C residence permit have the same rights, while those with a B residence permit need approval to purchase vacation homes and cannot acquire second homes or multi-family houses. Those without a C permit are only allowed to purchase a house or apartment in their place of residence, which they must occupy themselves.
The acquisition of real estate used as the permanent business premises for trade, manufacturing, or a freelance profession is exempt from the Lex Koller regulations. This includes:
However, problems arise when the property is used for both commercial and residential purposes.
The purchase of shares in Swiss-listed real estate companies is not subject to Lex Koller. However, for companies that are not publicly traded and whose purpose is to acquire or hold residential property, approval is required if residential property constitutes 10 to 20 percent of the company.
Some cantons allow the purchase of holiday homes in specific municipalities, particularly in tourist areas. Regulations for these properties vary widely and include:
Legal entities are also subject to Lex Koller. The acquisition of real estate by legal entities is subject to approval, especially if the entity is based abroad or controlled by foreign nationals. Exceptions apply if the property serves as a business establishment.
Lex Koller regulates the acquisition of real estate by foreign nationals in Switzerland and aims to protect the local real estate market. Strict restrictions are imposed on persons without residence in Switzerland, while EU/EFTA nationals with certain residence permits can more easily acquire property. Regulations vary depending on the type of property and the buyer's nationality. It is essential for interested parties to understand the specific conditions and exceptions to successfully acquire real estate in Switzerland. We are happy to provide advice and can involve experienced legal professionals to assist you with any questions regarding Lex Koller.
