Lex Koller: what could change for real estate purchases in Switzerland

In Switzerland, the acquisition of real estate by a foreign person is not always unrestricted. For several decades, the Federal Act on the Acquisition of Real Estate by Persons Abroad, commonly known as Lex Koller, has set a specific legal framework to limit certain real estate purchases by people who are not established in Switzerland.

Adopted in 1983 and in force since 1985, the law was originally intended to prevent an excessive share of foreign capital from entering the Swiss real estate market, particularly in a context where housing was meant to remain primarily accessible to people living in the country.

Over the years, some of these rules have been relaxed. Certain types of properties or investments, such as some commercial buildings, listed real estate companies and real estate funds, have become accessible to foreign investors without specific restrictions. This is precisely what the Federal Council now wants to review.

Why does the Federal Council want to amend Lex Koller?

Switzerland is currently facing strong pressure on its housing market. In major cities such as Geneva, Zurich and Lausanne, rents have increased significantly, and finding an available home has become increasingly difficult for many households.

In this context, the Federal Council considers that certain real estate purchases by people established abroad may add pressure to an already tight housing market. The aim is therefore not only to limit foreign investment, but also to bring Lex Koller back closer to its original purpose: protecting the Swiss residential property market.

The timing also comes in a sensitive political context. In June 2026, Swiss voters will be called to vote on the popular initiative “No Switzerland with 10 million inhabitants”, which raises concerns about demographic pressure on housing and infrastructure.

What is the Federal Council proposing?

For residential properties, nationals of countries outside the European Union and EFTA would have to obtain official authorisation before buying a property in Switzerland. Today, some people legally residing in Switzerland can purchase their home without specific restrictions. The proposal also provides that an owner subject to Lex Koller who permanently leaves Switzerland would have to resell the property within two years.

For commercial buildings, the revision would limit acquisitions to situations where the buyer uses the building for their own business activity. Buying a commercial property solely to rent it out to third parties would be more strictly regulated. This measure is intended to reduce purely patrimonial or speculative real estate investments.

For second homes, holiday homes and apartments located in tourist regions, the rules are already subject to cantonal quotas. The Federal Council proposes to further reduce these quotas and to require authorisation even when a holiday property is sold by one foreign person to another foreign person.

For financial investments, the proposal would remove some current exceptions. Until now, a foreign investor could acquire shares in Swiss listed real estate companies, or units in funds investing in residential property, without specific restrictions. The Federal Council wants these indirect real estate investments to be subject to stricter control as well.

Who would be concerned?

The majority of foreign residents in Switzerland come from countries within the European Union or EFTA, such as France, Italy, Germany, Portugal, Spain, Norway, Iceland or Liechtenstein. Due to bilateral agreements, these people would not be directly affected by the new restrictions regarding the purchase of their main residence.

The measures would mainly target nationals of third countries, people established abroad and certain investors structuring their acquisitions through companies or real estate investment vehicles.

For owners considering selling a property to a foreign buyer, or for investors wishing to acquire real estate in Switzerland, this development is therefore worth following closely.

A proposal still under discussion

It is important to remember that this revision is not yet law. At this stage, it is a preliminary draft submitted for consultation. Cantons, political parties, economic organisations and other stakeholders may express their position until 15 July 2026. The text may then be amended before being submitted to Parliament.

The final rules may therefore still evolve. However, the direction indicated by the Federal Council is clear: real estate acquisitions by persons abroad could be more strictly regulated in the future.

Why does this matter for a real estate project?

For an owner, buyer or investor, this revision is a reminder of an essential point: the feasibility of a real estate project does not depend only on the condition of the building, its architectural potential or the cost of renovation. It also depends on the legal, fiscal and regulatory framework in which the property is situated.

Before buying, selling, transforming or enhancing the value of a property, it is therefore increasingly important to analyse the broader context: the owner’s situation, the buyer’s status, the use of the property, its transformation potential, planning constraints, energy obligations and the likely evolution of the legal framework.

In a market as tight as Geneva, and more broadly French-speaking Switzerland, this global understanding has become essential in order to make informed decisions and avoid unpleasant surprises.

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If you are considering buying, selling, transforming or enhancing the value of a property in Switzerland, an early analysis of the legal, regulatory and architectural context can help you make informed decisions from the start.

Contact us for an initial assessment of your property’s potential and the strategic steps ahead

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