How to navigate Switzerland’s real estate laws as a foreign buyer

This article provides essential insights to guide an investor’s journey. It is designed to address common questions from clients and partners on local practices, drawing on deep industry knowledge.

In brief

• Foreign buyers face strict Swiss real estate laws, including Lex Koller, which limit non-resident ownership of residential property.
• Compliance is critical: violations can lead to nullified transactions and severe penalties, making expert legal guidance essential.
• EY Switzerland offers tailored legal and tax advisory services to help investors navigate regulations and secure their property investments.

Switzerland, renowned for its stunning landscapes, charming villages and high quality of life, has long been a sought-after destination for foreigners seeking the dream of owning a vacation home in this picturesque country, while benefiting from a stable real estate market with potential rental income. 

• Subject to Lex Koller:
  • EU/EFTA citizens who are not resident in Switzerland, or who reside in Switzerland without holding a B or C residence permit.
  • Non-EU/EFTA citizens who live outside Switzerland, or who reside in Switzerland without holding a C residence permit.
• Not subject to Lex Koller:
  • Swiss citizens (including dual nationals), regardless of residence.
  • EU/EFTA citizens residing in Switzerland with a B or C residence permit.
  • Non-EU/EFTA citizens residing in Switzerland with a C residence permit.

Important: These residence requirements must be met at the time of acquisition.

Property purchase rules for foreign buyers in Switzerland

Legal and de facto residence in Switzerland

If an individual is legally and de facto resident in Switzerland (meaning the center of life has been established here with the intention to remain permanently), the rules differ based on the permit type:

• EU/EFTA citizen or non-EU/EFTA citizen with permit B
  • Main residence: Owner-occupied (no renting out), one unit maximum and no limit on habitable area. If the plot exceeds 3,000 m², authorization is required. There is no need to sell if residence status changes. (No authorization required, usually no confirmation of exemption requested unless plot exceeds size limit.)
  • Vacation home: Allowed only in cantonal designated tourist areas. Application for a place in the annual cantonal contingent is required, limited to one vacation home per family; occasional rental is permitted. Habitable area is limited to 200 m²; plot area is limited to 1,000 m² (exceptions may apply). (Must apply for authorization.)

Without legal and de facto residence in Switzerland

If an individual does not have legal and de facto residence in Switzerland, stricter rules apply:

• EU/EFTA citizen (G permit – cross-border commuter)
  • Main residence: Allowed only in the workplace region, owner-occupied (no renting out), one unit maximum and no limit on habitable area. If the plot exceeds 1,000 m², authorization is required. (Must apply for authorization.)
  • Vacation home: Same as above – only in designated tourist areas, subject to cantonal contingent, one per family, occasional rental allowed. Habitable area limited to 200 m²; plot limited to 1,000 m². (Must apply for authorization.)
• EU/EFTA citizen or non-EU/EFTA citizen without permit
  • Main residence: Allowed only in some cantons and must be in a place where the individual maintains extremely close long-term relations worthy of protection. Owner-occupied only. Habitable area limited to 200 m²; plot limited to 1,000 m² (exceptions may apply). Must be sold within two years if requirements are violated. (Must apply for authorization.)
  • Vacation home: Same as above – only in designated tourist areas, subject to cantonal contingent, one per family, occasional rental allowed. Habitable area limited to 200 m²; plot limited to 1,000 m². (Must apply for authorization.)

Definitions

• Main residence: Dwelling where the individual establishes de facto domicile (center of life with intention to remain permanently).
• Secondary residence: Dwelling used only sporadically and neither as de facto domicile nor for professional or educational purposes (except for cross-border commuters). Secondary residences are subject to additional laws with purchase restrictions.

How long does it take to obtain confirmation of an exemption?

The time to obtain confirmation of exemption from the relevant authorities regarding Lex Koller restrictions depends on the canton and the complexity of the case. A minimum of one to three months should be allowed to obtain confirmation, plus an additional 30 days until a legally binding confirmation has been issued (unless all parties waive their right to appeal).

What are the risks of not complying with Lex Koller restrictions?

The notary involved in the transaction reviews legal requirements for foreign buyers to ensure compliance with Lex Koller. Legal specialists can help reduce real estate compliance risks and ensure proper structuring.
The purchase deed remains ineffective as long as regulatory authorization has not been obtained, or becomes null and void if authorization cannot be obtained. Authorization to purchase may be revoked if the condition precedent (i.e., obtaining regulatory authorization) is not met.
Criminal consequences: custodial sentence (maximum three years), a financial penalty (amount depends on total private assets), or a fine up to CHF 50,000.