Buying Real Estate in Switzerland for foreigners: what you need to know about the Lex Koller

Anyone considering acquiring real estate in Switzerland as a high-net-worth individual will quickly encounter a dense network of legal requirements. At the center of property regulation is the so-called Lex Koller – the Federal Act on the Acquisition of Real Estate by Persons Abroad (ANRA). This law determines the conditions and extent to which foreigners are permitted to buy land and properties in Switzerland. For many international clients, these regulations are a significant consideration in asset planning, succession, and tax optimization.

The Lex Koller: purpose and importance

Lex Koller was enacted to prevent highly sought-after Swiss real estate, especially apartments and single-family homes, from falling into foreign hands. Both policymakers and the public seek to protect domestic housing and prevent a sell-off of land to foreign investors. The law draws clear distinctions based on the buyer's origin, residency status, and the type and use of the desired property. In principle: non-Swiss nationals, and especially individuals without residence in Switzerland, require official approval to acquire real estate unless they qualify for specific exceptions.

Who is affected and what is allowed?

The fundamental question is: Am I considered a “person abroad” under Swiss law? This applies to all natural and legal persons who neither possess Swiss citizenship nor a permanent residence permit.

EU/EFTA citizens with a with a valid Swiss residence permit are generally treated the same as Swiss citizens, particularly regarding the acquisition of property for use as a primary residence. Third-country nationals with a C permit also have broad freedom to acquire real estate. However, foreigners without residence in Switzerland face particularly strict restrictions.

This distinction has significant consequences for the types of property that can be acquired. Foreigners who reside in Switzerland and intend to live there permanently can typically purchase a single-family home or condominium as a primary residence without restriction –provided they have a Swiss residence permit.

In contrast, Lex Koller imposes limitations regarding vacation residences or residential units in aparthotels: Only a limited number of such properties may be sold to foreigners per canton each year, and authorities rigorously check whether maximum size limits are observed and whether all requirements for approval are met. The net living space is usually capped at 200 m²per unit, and plots generally cannot exceed 1,000 m². Further, there is no right to permanent rental of such properties.

The purchase of secondary residences may be authorized for a natural person in a place with which they have exceptionally close ties that are worthy of protection, as long as these continue. The same size limits apply to second homes as to vacation homes.

In addition, permission to purchase vacation apartments and houses, residential units in apartment hotels and secondary residences is only possible if the cantons explicitly provide for this by law, which is not the case in all cantons. The situation is different for commercial properties: Business premises, office spaces, or hotels may be purchased by foreigners without particular restrictions, as long as the property is not intended for residential use. This offers attractive possibilities, especially for internationally active private clients beyond the classic residential real estate sector. Properties can generally also be transferred by inheritance or gift without approval – provided there are no circumvention attempts, such as a foreign testator acquiring several properties in Switzerland shortly before his/her death for the sole purpose of transferring them to his/her child living abroad.

The property acquisition process: official procedures, opportunities and risks

Whether a particular real estate project requires approval is always decided by the cantonal authorities at the property's location. Without such approval, any purchase contract is null, and void and the land registry will refuse to enter the sale – resulting in the reversal of any payments already made. Applying for approval, especially for vacation or secondary homes, can be complex; cantons operate a quota system and usually only allow the purchase of holiday properties by foreigners in clearly defined tourist regions.

Buying property in Switzerland does not entitle the buyer to a residence or settlement permit. Therefore, those hoping to gain a right of residence through property acquisition will be disappointed: Only successful immigration and possession of a recognized residence permit allow for unrestricted acquisition of residential property.

Taxes and fees on acquisition, ownership, and transfer (such as by gift or inheritance) vary considerably from canton to canton. Comprehensive tax advice and long-term, detailed planning that includes real estate, tax, and inheritance law experts are therefore essential. In recent years, the authorities have particularly focused on succession cases, structured family wealth, and transfers into holding structures.

Recent developments and outlook

Lex Koller continues to be the subject of political debate. Calls to further restrict the rights of foreigners — including those from EU/EFTA countries — or to extend the regulations to commercial properties are made regularly. Meanwhile, international private clients remain deeply interested in Switzerland for its secure property rights, political stability, and attractive fiscal environment. Legislators have so far limited themselves to targeted adjustments, such as tighter controls on chain transfers and clarifying how mixed-use properties are assessed. Private buyers must keep pace with changing laws and regularly reassess their options.

Recommendation for Private Clients: Planning and Expertise Are Key

Those seeking to buy a house, apartment, or vacation property in Switzerland as a wealthy foreign private investor should seek early advice from specialized legal and tax experts. Key factors for success include having a clear objective (be it a primary residence, vacation home, investment property, or succession planning), proper preparation of all personal documentation (residence permit, proof of funds, family circumstances), and strict adherence to formal processes. Failing to do so risks not only delays and reversals of transactions but also significant financial drawbacks.

Although Swiss Lex Koller regulations are complex, with the right preparation, professional support, and forward-looking planning, they are not an insurmountable hurdle. Particularly for internationally positioned wealth structures, early assessment of the legal framework in conjunction with residence and succession considerations is the key to lasting success in the attractive Swiss real estate market.

For any questions, Andrea Franco Stoehr (Partner, andrea-franco.stoehr@nist-law.ch) is at your disposal. You can also contact us at +41 81 851 09 10 | info@nist-law.ch, we will be happy to assist you.