Do you live abroad and dream of owning a mountain chalet in Valais? Are you a foreign national living in Switzerland and want to buy a main residence on Swiss territory? Follow in the footsteps of Alex, Dimitri, Saskia and Emily and you will know everything about buying a home in Switzerland!
As a foreign citizen, you can acquire a property in Switzerland under certain conditions. These are defined in the Federal Act on the Acquisition of Real Estate by Persons Abroad (LFAIE) which came into force in 1985. The application of the LFAIE is the responsibility of the Cantons. However, the federal standards are interpreted and applied more or less strictly depending on the cantonal authorities. The LFAIE is known as the “Lex Koller”, named after the CVP Federal Councillor Arnold Koller. This law aims to limit the speculative hold of foreign nationals on real estate in Switzerland.
This law is relatively complex. It varies depending on your type of residence permit in Switzerland, your country of origin and your place of residence. In addition, the law changes depending on what you intend to use the real estate in question for: primary residence, holiday accommodation, commercial premises, etc. Note that “real estate” refers to various categories of property. Villas, apartments, land, buildings are concerned.
You are subject to the LFAIE and must obtain an authorization to have the right to acquire a property in Switzerland if you are domiciled abroad. You will also be if you are a foreigner residing in Switzerland but not a national of a member country of the European Community (EC) or the European Free Trade Association (EFTA) and do not have a valid settlement permit (C permit). However, as a holder of a B permit, you do not need to apply for a permit but are subject to certain restrictions. To easily find your way through the maze of the LFAIE, read the case scenarios below.
As a citizen of an EC member country and in possession of a B permit, Alex is considered in the same way as a Swiss. He can therefore freely acquire one / more primary or secondary residences, this for personal or investment purposes.
The Russian Dimitri (national of a country outside the European Union, with a B permit) can also buy a property without authorization. However, he must commit in the deed of sale to make it his main residence. Dimitri will have to buy it in his own name and not through a company. Finally, he will not be able to rent it. Certain limitations regarding the surface of the plot will be added, in order to avoid capital investments.
If Dimitri obtains a C permit, he will no longer be subject to these restrictions. Finally, like his compatriots back home, he has the right to acquire real estate for commercial or industrial use in Switzerland. However, they must ensure that the reserve area does not exceed 1/3 of the undeveloped area of the plot. This applies in the case of the acquisition of an entire plot of land and not an office built in a condominium building, for example.
Saskia lives abroad and is therefore affected by the restrictions of the LFAIE. She will have to apply to the competent cantonal authority of the place in which her property is located to obtain a permit. The latter will only be granted within the limit of the quota set at 1,500 properties per year for the whole of Switzerland. These units are distributed among the cantons that include municipalities considered as “tourist areas”. The list of cantons concerned includes, for example, Valais, Ticino, Vaud, Graubünden and Bern. Geneva and Zurich are not included.
These quotas are intended to preserve certain highly touristy regions from foreign influence and guard against “cold beds”. The maximum living area set by the LFAIE is 200 m2 and that of the land 1’000 m2, with certain possible exemptions. Finally, Saskia will only be able to rent out her home temporarily. She will only be allowed to resell it after a period of five years.
Like Saskia, Emily lives abroad. This means that she can only acquire a holiday home in an expressly determined tourist area. Because it is a new construction, she will also have to ensure that she complies with the conditions issued by the Swiss Federal Law on Second Homes (LRS).
The SRG is known as the “Lex Weber” and came into force in 2016. This regulation affects her under the same regime as the Swiss. It prohibits any new second homes in municipalities with more than 20% of them. Finally, Emily will have to take into consideration the revision of the Law on Spatial Planning (LAT) which stipulates that urban development takes place primarily in existing building zones. The main objective of this amendment is to curb the sprawl of the territory.
#In short : as a foreigner, you can certainly buy property in Switzerland. However, the restrictions are significant and differ from case to case. Call in a specialist to bring your project to fruition!