Switzerland is recognised worldwide as an attractive country to live, work and invest in - so it's no wonder that many foreigners want to invest in property. But foreign buyers in particular are subject to special legal regulations that have little control over them. The so-called Lex Koller, which regulates property purchases for people abroad, plays a central role. In this article, I explain exactly what the Lex Koller is, to whom it applies and under what conditions foreigners are allowed to buy property in Switzerland.
What is the Lex Koller
The Lex Koller - officially the "Federal Law 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 too many properties in Switzerland from falling into foreign hands, especially in popular holiday regions. It is intended to protect the property market in Switzerland and restrict excessive buying by investors from abroad. The law defines which properties may be purchased by persons abroad, whether a licence is required and under what conditions.
Heat is considered a "personal abroad"
The law distinguishes between Swiss nationals, Swiss residents and non-residents. A "person abroad" is someone who does not have a permanent residence permit (e.g. C settlement permit). Third-country nationals such as people from the USA, China or Russia who are not resident in Switzerland definitely fall under this category. EU or EFTA citizens resident in Switzerland with a B permit may in certain cases purchase a main residence, but must always comply with the law. With a C permit, however, you are on an equal footing with Swiss citizens.
Companies based abroad or straw men are also counted as "persons abroad" - so this also applies to property buyers who try to circumvent the law.
Which properties may be bought by residents - and which may not
In principle, the following applies: If someone lives in Switzerland and has a valid residence status, they can buy a main residence, i.e. a condominium or a house that they actually need themselves. This is possible, for example, for people with a B or C permit.
Residents are only allowed to buy holiday homes in certain zones - for example, in well-known regions such as Valais, Ticino or Graubünden. But even then, a cantonal authorisation procedure is required. It is practically impossible for foreigners who do not live in Switzerland to buy building land or apartment blocks for rent.
What is always permitted are commercial properties - e.g. a restaurant or an office. People abroad can also buy these without a licence, as long as they are not needed for residential purposes.
What role do the cantons play
Even though the Lex Koller is a federal law, it is mainly implemented by the cantons. This means that each canton can define its own guidelines and criteria for authorisation procedures. In holiday cantons such as Graubünden or Valais, there is greater understanding for foreign buyers, but the procedure is still strict. In other cantons such as Zurich or Basel, it is practically impossible for foreigners to buy property - especially holiday or rental property.
How the authorisation procedure works
If a foreign person wants to buy a property that requires a licence, they must apply to the relevant cantonal authority. They check whether all the requirements have been met - for example, whether the property is actually located in a permitted zone, whether the living space fulfils 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 people in Switzerland don't know exactly what is allowed and what isn't - and so they unknowingly make mistakes. For example, they often try to buy property via straw men or letterbox companies. Or they pass off properties as their main residence that are actually used as holiday homes.
Such violations can have serious consequences: Not only will the contract be declared invalid, but fines will also be issued or, in the worst case, criminal law will be activated. That's why it's extremely important to inform yourself seriously and in good time and to seek legal support where necessary.
What do foreigners have to consider before travelling
It makes sense to consider your residence status before buying property. The difference between B and C permits is crucial. Foreigners must also be aware 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 included in 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 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 regulations, inform yourself correctly and don't forget to take care.
If you have any questions or need help buying property in Switzerland, you can contact us at any time. Contact us and I am happy to support you.
