Guide to the Lex Koller: Buying Property in Switzerland as a Foreigner

Switzerland has specific regulations governing the purchase of real estate by foreign nationals, primarily defined by the Lex Koller law. This guide aims to clearly explain the key points of this law while providing additional useful information for prospective foreign buyers.

Since 1961, Switzerland has implemented regulations to limit and control real estate acquisitions by people residing abroad or those without Swiss nationality. The current law, commonly known as Lex Koller, primarily aims to prevent foreign real estate speculation and to maintain a balance between supply and demand in the Swiss market, particularly to protect the landscape and prevent an overheating of property prices.

You will need to obtain authorization if both of the following conditions apply:

• You are considered a foreign person under the law.
• The property you wish to acquire falls under the authorization regime of the Lex Koller.

The Lex Koller primarily applies to:

• Foreigners residing outside Switzerland.

• Citizens of the European Union (EU) or the European Free Trade Association (EFTA) residing in Switzerland without a B, C, or L permit.

• Nationals of other countries residing in Switzerland but without a permanent residence permit (C permit).

Important: Marital status can influence your situation. For example, purchasing jointly with a Swiss spouse or a C permit holder can facilitate the acquisition.

Several exceptions allow purchases without prior authorization:

No authorization is required if the property is intended exclusively or primarily for commercial or professional use, such as:

• Headquarters of a commercial or industrial company

• Workshop premises

• Offices for liberal professions (doctors, lawyers, etc.)

• Restaurants and shops

In the case of mixed-use properties, the residential portion must not exceed 50% to avoid requiring authorization. A later change in usage could necessitate retroactive authorization. If the residential proportion exceeds 50% at a later stage, retroactive authorization may be required from the relevant cantonal authorities.

The following foreigners can acquire a property without authorization:

• EU/EFTA citizens legally residing in Switzerland with a B, C, or sometimes L permit.

• Citizens of other countries residing in Switzerland with a permanent residence permit (C).

Non-EU/EFTA nationals with a B permit can buy their primary residence without authorization but cannot rent it out and must personally occupy it. Proof of actual residence in Switzerland will be required (participation in local life, children's enrollment in local schools, vehicle registration, etc.).

Foreigners can acquire shares in Swiss real estate companies or investment funds listed in Switzerland, provided that the real estate portfolio of these entities is primarily composed of commercial properties. If the company owns residential properties in Switzerland subject to authorization representing a significant share (typically between 10% and 20%), the acquisition of shares by foreigners is restricted or even prohibited. In all cases, prior authorization will be required.

The acquisition of holiday homes by foreigners residing abroad is subject to restrictions. An annual quota of 1,500 properties is allocated among several cantons authorized to offer this type of purchase (Valais, Vaud, Ticino, Grisons, Bern, etc.).

The property must meet specific conditions:

• Maximum residential area: Varies by canton, typically around 200 m² (excluding cellars, attics, garages, balconies).

• Cantonal annual quotas: Higher in Valais (around 330 permits), very limited elsewhere (20 units per year in some cantons).

Important: It is advisable to check with the relevant cantonal register before proceeding to verify the availability of annual quotas.

For businesses, real estate acquisition is only possible if the company’s headquarters are located in Switzerland and if they are controlled by residents of Switzerland. Companies where a portion of the capital or control is held by foreign persons (typically from 1/3 foreign ownership) must obtain prior authorization before any real estate acquisition.

In practice, obtaining this authorization can be complex and often requires justifying the economic or strategic necessity of the real estate project.

What Documents Must Be Provided to the Authorities?
The competent authorities (cantonal or municipal services) will generally require the following documents:

• Proof of identity

• Proof of residence or residence permit

• Tax certificate and financial documents

• Signed purchase contract (subject to authorization)

For residential property purchases, the authorities may require additional guarantees (insurance, non-rental commitments, etc.).

In conclusion, while the Lex Koller strictly regulates foreign access to Swiss real estate, it is not an insurmountable barrier. It is important to note that each canton in Switzerland may have its own additional regulations beyond the Lex Koller. Foreign investors must submit a prior request for authorization to purchase property in Switzerland. Being well-informed and advised by local professionals, such as notaries or specialized lawyers, will help you navigate your real estate project in Switzerland smoothly. The Canton of Valais provides all directives regarding the application of the LFAIE (Lex Koller) and documents to be attached to acquisition requests.