Menu

Featured

Technology consulting

Sustainability and ESG

Menu

Loading Results

Lex Koller

Tightening ahead for real estate acquisitions by persons abroad
Final regulations
  • Blog
  • 6 minute read
  • 08/05/26

The "Lex Koller," which has governed the acquisition of real estate in Switzerland by foreign persons since 1985, is about to undergo substantial modifications aimed at restricting access to real estate ownership in Switzerland. As part of the accompanying measures linked to the popular initiative "No Switzerland of 10 million!", the Federal Council proposes to significantly tighten the conditions for purchases by foreign persons: new authorisations for primary residences of third-country nationals, an end to the acquisition of commercial properties for pure investment purposes, restrictions on the purchase of holiday homes, and the subjection of shares in publicly listed real estate companies to the authorisation regime. The preliminary draft is open for consultation until July 15, 2026.

Background

In force since January 1, 1985, the Federal Act on the Acquisition of Real Estate by Foreign Persons (LFAIE), better known as the "Lex Koller," aims to prevent foreign control over Swiss land by subjecting the acquisition of real estate in Switzerland by persons—both natural and legal—qualified as "foreign persons" to an authorisation regime.

The notion of "foreign person," defined in Art. 5 LFAIE, encompasses not only natural and legal persons domiciled or headquartered abroad, but also third-country nationals (non-EU/EFTA) residing in Switzerland with a simple residence permit (B permit), as well as legal entities headquartered in Switzerland in which foreign persons hold a dominant position.

However, the Lex Koller has undergone several successive relaxations over recent decades. For example, since 2002, EU and EFTA nationals domiciled in Switzerland have been exempt from the authorisation regime for all real estate acquisitions. Similarly, third-country nationals holding a settlement permit (C permit) are also exempt from obtaining any authorisation.

Furthermore, foreign persons may currently acquire, without any prior authorisation, real estate used for commercial, artisanal, or professional activities, including for pure capital investment purposes, and may hold shares in publicly listed real estate companies or real estate funds without restriction.

The Federal Council now considers that these relaxations have gone too far. On April 15, 2026, the Federal Department of Justice and Police (FDJP) opened the consultation procedure on a preliminary draft revision aimed at significantly tightening the conditions for the acquisition of real estate by "foreign persons."

Why such measures?

This draft revision is part of the accompanying measures decided by the Federal Council on January 29, 2025, in connection with the popular initiative "No Switzerland of 10 million!" (also known as the "sustainability initiative").

This initiative aims to limit the demographic growth of Switzerland. The Federal Council, however, recommends rejecting it, considering that its adoption would be detrimental to the economy, prosperity, security, and the functioning of society. It acknowledges, however, that immigration and population growth pose real challenges, particularly in the housing market. That is why, rather than accepting the initiative, the Federal Council proposes a set of accompanying measures in the areas of the labor market, housing, and asylum, with the tightening of the Lex Koller being one of these measures.

The objective of this text is clear: in an extremely tight housing market, the Federal Council wishes to make real estate and real estate companies more available to the resident population and Swiss investors, thereby reducing Switzerland's attractiveness for foreign real estate investors.

Main proposed amendments

The proposed measures apply to all "foreign persons" within the meaning of Art. 5 LFAIE. EU/EFTA nationals domiciled in Switzerland, as well as third-country nationals holding a C permit, will remain exempt from the authorisation regime and will therefore not be affected by these modifications if they enter into force as they stand.

However, EU/EFTA nationals not domiciled in Switzerland, third-country nationals (with the exception of C permit holders), and legal entities domiciled abroad or controlled by foreign persons are affected by all or some of the following measures.

The preliminary draft provides for subjecting the acquisition of primary residences by third-country nationals domiciled in Switzerland and holding a B permit to authorisation. Under current legislation, a third-country national holding a B permit may freely purchase a home for personal use.

Key point of this measure: If such a national, having become the owner of real estate in Switzerland, were to move—whether abroad, to another Swiss municipality, or even to another dwelling in the same municipality—they would now be required to resell the property within two years. This obligation aims to prevent primary residences from being acquired for disguised capital investment purposes. If the property is not resold within the prescribed time frame, the competent authority may order a private sale or forced realisation of the property.

This measure applies to all foreign persons, including EU/EFTA nationals not domiciled in Switzerland and legal entities headquartered abroad.

Currently, foreign persons may acquire real estate serving as a permanent establishment without authorisation, including for renting to third parties.

The preliminary draft provides that only the acquirer who personally operates the establishment in question will be exempt from the authorisation requirement, regardless of their nationality.

Conversely, the acquisition of commercial properties for pure investment purposes—i.e., those acquired to be rented out without personal operation—will once again be subject to the authorisation regime and, in practice, virtually prohibited, as the grounds for authorisation are very restrictive.

Clarification: Companies headquartered abroad will, however, first need to establish a subsidiary headquartered in Switzerland in order to acquire, through this subsidiary and without authorisation, real estate serving as a permanent establishment.

Two measures are envisaged to restrict the acquisition of holiday homes and residential units in apartment hotels by all foreign persons:

  • Reduction of cantonal quotas: Cantons will have reduced annual authorisation quotas for this type of acquisition, which will mechanically limit the number of holiday homes that can be sold to foreign persons.
  • Re-subjection of transfers between foreign persons: Since 2002, when a foreign person acquired a holiday home from another foreign person, this transaction was not counted against the cantonal quota. The preliminary draft provides for re-subjecting these transfers to the authorisation regime and counting them against the quotas.

The Lex Koller currently provides that foreign persons, regardless of their nationality or place of domicile, may freely acquire shares in publicly listed residential real estate companies, as well as shares in real estate funds and real estate SICAVs regularly traded on the market.

The preliminary draft provides for the removal of this exemption for all foreign persons. The acquisition of these instruments will once again be subject to the authorisation regime. Given the very restrictive nature of the grounds for authorisation, this measure will in practice amount to a near-prohibition. The Federal Council justifies this reversal by the fact that Swiss land must not serve as a vehicle for foreign capital investments for yield or speculative purposes, and that the increase in share acquisitions by foreign persons strengthens their control over Swiss land.

Next steps

The text is currently at the preliminary draft stage, open for consultation. Interested parties (cantons, political parties, professional associations, and other stakeholders) have until July 15, 2026 to submit their observations to the Federal Council.

At the end of the consultation, the Federal Council will analyse the results and prepare a dispatch accompanied by a draft law to be submitted to the Federal Assembly (National Council and Council of States). Since the amendments must be enacted in the form of a federal law (in accordance with Art. 164(1) of the Constitution), they must be approved by both chambers of Parliament. Once adopted, the amendment will, where applicable, be subject to an optional referendum procedure.

Finally, the Federal Council will set the date of entry into force of the amendments and coordinate the adaptation of the implementing ordinance (OAIE). The cantons may then adapt their own legislation accordingly.

Although the path ahead before any possible entry into force of the text is still long, it is essential for the various actors in the Swiss real estate market to follow the evolution of this dossier with interest and anticipate the potential consequences of this text on their activities.

Contact us

No search results

Related content

© 2018 - 2026 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.