Buying Real Estates in Switzerland a Guide for Foreign Citizens

How do I buy a property as a foreigner in Switzerland?

The Swiss real estate market has been restricted by law for foreign citizens since 1961, so that the purchase of real estate has been heavily regulated.

However, the strict application of the laws has been relaxed over the past decades and are now known as “Lex Koller”. The law, which is valid throughout Switzerland, is executed by the respective cantons.

This also includes which real estate purchases and transactions for foreigners require a permit. In the following, we will gladly explain to you which particularities you have to pay attention to when buying real estate.

What is “Lex Koller”

Lex Koller is the term in use today regarding the acquisition of real estate by persons abroad from 1983 and thus regulates which permits must be provided when purchasing real estate in Switzerland.

The law, known in technical jargon as “Lex Koller”, has its origins in 1961, when the citizens of Switzerland feared that the country could be endangered by real estate purchases by foreigners. Since then, the law has been amended several times. Since the law is a federal law, it is applicable to the whole of Switzerland and is implemented by the cantons.

The law “Lex Koller” exclusively regulates under which circumstances foreigners are allowed to buy real estate and which real estate transactions require a permit for foreigners. For this purpose, criteria have been developed which give rise to an obligation to obtain a permit:

1. The person carrying out a real estate transaction in Switzerland must be a foreigner

2. The real estate itself must be subject to the permit requirement due to its use

3. It must be a real estate acquisition within the meaning of the Federal Law on the Acquisition of Real Estate by Persons Abroad.

If these characteristics are present, the real estate purchase or real estate acquisition is subject to authorization, but if these points are not present, authorization is not required.

 Which groups of persons are subject to the “Lex Koller”, respectively who needs a permit for a real estate purchase?

The following groups count as foreign persons requiring a permit for the purchase of real estate:

1. The person’s residence must be abroad

2. The person buying the real estate must have his residence or settlement permit, not in the European Union (EU) or in an EFTA country.

inside of a Luxury Penthouse to buy in Andermatt Switzerland, innenraum eines Luxuspenthouses zu verkaufen Andermatt

Who does not need a permit to buy a property in Switzerland?

1. On the one hand, Swiss citizens who have dual citizenship, regardless of whether they are domiciled in Switzerland or abroad

2. Citizens from the EU or an EFTA country with regular residence in Switzerland 3. Citizens from other countries of origin with a C permit

Are there exceptions to the permit requirement for the purchase of real estate?

Even despite the provisions of the “Lex Koller”, foreigners can purchase real estate in Switzerland that is not subject to the permit requirement.
These include:

Commercial real estate and catering businesses

If you intend to acquire a commercially managed property (commercial business, manufacturing company, etc.), this property acquisition is not subject to the permit requirement. The same applies to medical practices or restaurants. However, it must be ensured that the real estate to be acquired is used exclusively for a commercial purpose and is not simultaneously used for private residential purposes. This would only be possible within narrow limits. This would be the case if there were an operational necessity or if it were not possible to separate the property from its commercial use.

Foreigners with residence and tax domicile in Switzerland

An exception also applies to foreigners who have their residence and tax domicile in Switzerland. They are then not subject to the permit requirement if they wish to purchase a property at their place of residence in Switzerland, but with the restriction that they do not rent the property to others. As stated above, this restriction does not apply to EU or EFTA citizens. 

Real Estate Funds and Real Estate Companies Listed on the Swiss Stock Exchange

Another possibility to circumvent the licensing requirement would be to establish a real estate company or a real estate fund and list it on the Swiss stock exchange. However, these must be subject to the Swiss Financial Market Supervisory Authority.