In an effort to combat the housing shortage, the government intends to make the access to primary residences by non-resident nationals of countries outside the European Union and EFTA (Norway, Iceland, and Liechtenstein) subject to special authorisation.
"The Federal Council intends to tighten the Federal Act on the Acquisition of Real Estate by Persons Abroad," it said in a press release, adding that it also plans to tighten restrictions regarding holiday homes. The annual quotas available to the cantons for purchases of these residences by third-country citizens will be reduced.
Additionally, sales between non-resident foreign nationals will be subject to authorisation as well.
Lastly, ministers propose to tighten the conditions for acquiring commercial properties by non-resident foreigners.
“Only those who operate the establishment themselves will continue to be exempt from the requirement to obtain authorisation,” the Federal Council said. “To prevent purchases made solely for investment purposes, foreign nationals will no longer be able to acquire commercial buildings, to subsequently rent or lease them out.”
It added that these measures “aim to refocus the Lex Koller on its primary objective.”
And that brings up the question of what is ‘Lex Koller’ and its ‘primary objective'?
Otherwise known by its much longer name – the Federal Act on Acquisition of Real Estate by Persons Abroad – the legislation, enacted in 1985, was named after Arnold Killer, a former MP who instigated this legislation (‘lex’ is a Latin word for ‘law’).
The original purpose of this legislation was to "prevent foreign influence on Swiss soil,” and especially to stop Swiss real estate from falling into foreign hands.
However, not all non-resident foreigners are equal before this law, as it distinguishes between certain categories.
For instance, nationals of the EU/EFTA states, as well as those who live and pay taxes in Switzerland, are exempted from these rules
So, in effect, the legislation targets mostly those from third countries, unless they have a C permit.
All others need a special permission to purchase Swiss property.
READ MORE: What are Switzerland's rules for foreigners buying property?
What happens next?
At this point, the tightening of the current rules is just a proposal, which will be under consultation until July 15th, 2026.
This way, cantons, political parties, interested groups, as well as citizens can have their say on the issue at hand.
Once this phase is over – and broad support is given to this issue - the draft will be submitted to the Parliament for deliberations.
And there are more restrictions in place as well
The law stipulates that:
- The property must be located in a tourist area.
- The living space may not exceed 200 square metres and th outside area is limited to 1,000 square metres.
- Non EU/EFTA nationals cannot rent out the property all year round; only temporarily if it is a holiday home, and not at all if it is a second home.
- You may not own more than one holiday home or second home in Switzerland.
And, like Swiss citizens, foreign nationals cannot build a second home in a commune where more than 20 percent of properties are already second homes.
Comments