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The Lex Koller makes it more difficult for foreign buyers to purchase residential property in Switzerland. What rules apply in practice and how they affect the market.
The Lex Koller, more officially the Federal Act on the Acquisition of Real Estate by Persons Abroad (BewG), regulates the purchase of real estate in Switzerland by foreign nationals. The law has been in force since 1 January 1985; since then, “persons abroad” must obtain authorization from the competent cantonal authority to purchase a property or a plot of land. Not all foreign nationals require such authorization; what matters is whether a person is considered a “person abroad” under the BewG.
The Lex Koller restricts the purchase of real estate in Switzerland for several groups. Among others, the following are considered “persons abroad”:
“Persons abroad” must first obtain a permit from the cantonal authority. Reasons for granting a permit include, among others, the purchase of a second home if the person can demonstrate a close personal connection to the location, or the acquisition of holiday apartments and residential units in apartment hotels within the framework of the cantonal quotas. As a rule, the net living area may not exceed 200 square meters and, in the case of houses, the total area of the plot may not exceed 1,000 square meters.
Citizens of EU and EFTA countries who live in Switzerland, as well as persons from third countries with a C settlement permit, can acquire real estate here without restrictions. In this respect, they are treated the same as Swiss citizens.
(1) Including building land, construction must begin within one year. (2) Listed shares of residential real estate companies and shares of real estate funds or real estate SICAVs regularly traded on the market. Uncertainty remains with respect to investments in commercial property-focused vehicles. (3) Only for owner-occupied property; maximum one housing unit; NEW: must be sold within two years in case of departure. (4) NEW national quota of 600; not for year-round rental; limitation of net living area and land area; further cantonal regulations may apply.
The law provides for a few exceptions to the Lex Koller. For example, no permit is required in the following cases:
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Since its introduction in 1985, the Lex Koller has been selectively relaxed, but the political winds have now changed. A tightening of the law is currently under consultation until July 2026. The Federal Council is proposing the following measures:
The planned tightening of the Lex Koller does address the existing problems in the Swiss real estate market. Overall, however, it can be assumed that the proposed tightening will have only a limited effect. This is because the measures are unlikely to ease the housing shortage or significantly limit immigration.
Foreign persons without a residence permit have only a limited influence on the owner‑occupied housing market in Switzerland overall. In addition, a reduction in the quotas for vacation homes is unlikely to curb foreign demand for Swiss real estate in prime tourist locations.
Potential implications for the following market segments
The Lex Koller has generally proven effective as a tool for limiting foreign real estate purchases. It dampens demand for Swiss residential property as a pure capital investment and thus helps to limit speculative excesses and strong price fluctuations in the market. In this respect, it fulfils an important purpose..
At the same time, the law is not a cure‑all for the challenges in the Swiss real estate market. The most important driver of rising property prices remains strong domestic demand combined with limited supply. A tightening of the Lex Koller could further restrict access for foreign buyers and regulate certain market segments more strictly.
However, the impact on housing shortages and price growth is likely to remain limited. Measures on the supply side are therefore more important. To effectively address housing scarcity and rising prices, policymakers should focus on enabling the creation of more housing.
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