Understanding Lex Koller: A Practical Overview

Lex Koller — formally the Federal Act on the Acquisition of Real Estate by Persons Abroad — is Switzerland's principal legal instrument for restricting foreign ownership of residential property. It has been in force, in various forms, since 1983, and it remains one of the most significant regulatory considerations for any non-Swiss national considering a property acquisition in Switzerland.

The law is frequently misunderstood, and the misunderstandings tend to run in both directions: some foreign buyers assume they cannot purchase property in Switzerland at all, while others assume the restrictions are easily circumvented. Neither is accurate.

Who Is Subject to Lex Koller?

Lex Koller applies to "persons abroad" — a category that includes foreign nationals who are not resident in Switzerland, as well as certain legal entities controlled by foreign interests. Swiss nationals are not subject to the law, regardless of where they live. EU and EFTA nationals who hold a valid Swiss residence permit (B or C permit) are generally treated equivalently to Swiss nationals for the purposes of property acquisition.

Non-EU/EFTA nationals who hold a C permit (permanent residence) are also generally exempt from Lex Koller restrictions for the acquisition of a primary residence. The position for B permit holders from non-EU/EFTA countries is more complex and depends on the specific circumstances.

"Lex Koller is not a prohibition on foreign ownership. It is a regulatory framework that requires authorisation in certain circumstances — and that framework has meaningful exceptions."

What Does Lex Koller Restrict?

The law restricts the acquisition of residential property — apartments, houses and holiday homes — by persons abroad. It does not restrict the acquisition of commercial property, which is an important distinction for buyers considering mixed-use or investment properties.

For residential property, the key distinction is between a primary residence and a secondary or holiday residence. A foreign national who is resident in Switzerland and acquiring a primary residence is generally not subject to Lex Koller restrictions. A foreign national acquiring a secondary or holiday residence is subject to the cantonal quota system.

The Cantonal Quota System

Each canton is allocated an annual quota of authorisations for the acquisition of holiday homes by persons abroad. The quotas are set by the federal government and vary by canton. Cantons with significant tourism infrastructure — Valais, Graubünden, Bern Oberland — tend to have larger quotas. Cantons without a significant holiday home market may have very small or no quotas.

The practical implication is that in cantons with active quota systems, the number of authorisations available in any given year is limited, and competition for them can be significant. In cantons where the quota is effectively exhausted, it may be very difficult for a foreign buyer to obtain authorisation for a holiday home acquisition.

Practical Implications for Buyers

For foreign buyers considering Switzerland, the starting point is always to establish their permit status and residence intentions. A buyer who is planning to relocate to Switzerland and establish primary residence will face a very different regulatory position from a buyer who wishes to acquire a holiday home while remaining resident abroad.

Legal advice from a Swiss attorney with expertise in Lex Koller is essential before any acquisition. The law has been amended multiple times, and the interaction between federal rules, cantonal quotas and individual permit status is complex. An experienced advisory team can identify the options available and structure an acquisition appropriately.