Switzerland is recognised worldwide as an attractive country to live, work and invest in. It is therefore only natural that many foreigners want to invest in property. However, there are special legal regulations for foreign buyers in particular, which are often not sufficiently well known. The so-called Lex Koller, which regulates property purchases for people abroad, plays a central role here. In this article, we explain exactly what the Lex Koller is, who it applies to and under what conditions foreigners are allowed to buy property in Switzerland.
What is the Lex Koller?
The Lex Koller - officially the «Federal Act on the Acquisition of Real Estate by Persons Abroad» - is a federal law that has been in force for more than 30 years. The aim of the law is to prevent excessive alienation of property in Switzerland, particularly in popular holiday regions. It is intended to protect the Swiss property market and restrict excessive purchases by investors from abroad. This law defines which properties may be purchased by persons abroad, whether authorisation is required and under what conditions.
Who is considered a «person abroad»?
The law distinguishes between Swiss citizens, foreign nationals resident in Switzerland and non-residents. A «person abroad» is someone who does not have a permanent residence permit (e.g. C permanent residence permit). Third-country nationals such as persons from the USA, China or Russia who are not resident in Switzerland are definitely included. EU or EFTA citizens resident in Switzerland with a B permit may acquire a main residence in certain cases, but must always adhere to the legal requirements. With a C permit, foreigners are treated in the same way as Swiss citizens.
Companies based abroad or straw men also count as «persons abroad». This therefore also applies to property buyers who try to circumvent the law in a roundabout way.
Which properties are foreigners allowed to buy - and which are not?
In principle, anyone who lives in Switzerland and has a valid residence status may acquire a main residence, i.e. a condominium or house that they actually live in themselves. This is possible, for example, for people with a B or C permit.
Foreigners may only purchase holiday properties in certain zones - for example in well-known regions such as Valais, Ticino or Graubünden. But here too, a cantonal authorisation procedure is required. Building land or apartment blocks for rent are practically impossible to acquire for foreigners who do not live in Switzerland.
What is always permitted are commercial properties - for example, a restaurant or an office. These can also be purchased by people abroad without a licence as long as they are not used for residential purposes.
What role do the cantons play?
Even though the Lex Koller is a federal law, it is primarily implemented by the cantons. This means that each canton can define its own guidelines and criteria for authorisation procedures. In the holiday cantons such as Graubünden or Valais, there is greater understanding for foreign buyers, but the procedure is nevertheless strict. In other cantons such as Zurich or Basel, it is practically impossible for foreigners to buy property - especially holiday or rental properties.
How does the authorisation procedure work?
If a foreign person wishes to purchase a property that requires authorisation, they must apply to the relevant cantonal authority. This authority checks whether all requirements are met - for example, whether the property is actually located in a permitted zone, whether the living space meets the requirements and whether the law is being implemented correctly. Depending on the region, the processing time may take several weeks or even months. Without a valid licence, the property purchase is null and void, i.e. it is declared invalid.
What are typical mistakes - and what happens if you break the law?
Many foreigners do not know exactly what is allowed and what is not - and therefore unknowingly make mistakes. For example, they often try to buy through straw men or letterbox companies. Or they list properties as their main residence that are actually used as holiday homes.
Such offences can have serious consequences: Not only will the contract be declared invalid, but fines may also be imposed or, in the worst case, criminal law may be invoked. It is therefore extremely important to obtain serious information at an early stage and seek legal support where necessary.
What do foreigners need to consider before buying?
It makes sense to consider your residence status before buying a property. The difference between B and C permits is crucial. Foreigners must also be aware of the fact that the cantons deal with permits differently. It is therefore advisable to contact a competent legal office or notary with experience in property law.
The subsequent costs of buying a property - such as maintenance, insurance and, above all, taxation - must also be factored into the planning at an early stage.
Conclusion
The Lex Koller ensures that property in Switzerland does not become an object of speculation for investors from all over the world. For foreigners, property acquisition is therefore clearly regulated - but not impossible. Anyone who lives in Switzerland or wants to invest in certain commercial properties has a good chance of buying property legally and correctly. The decisive factor is that you know the rules, inform yourself correctly and do not try to take detours.
If you have any questions or need help buying property in Switzerland, you can contact us at any time via our Contact form and we are happy to support you.
