Lex Koller in Switzerland: A Practical Guide for Foreign Investors and Owners

Introduction: understanding the Lex Koller in a few minutes

The Lex Koller in Switzerland is the federal law on the acquisition of real estate by persons abroad (LFAIE). It determines which foreign buyers may acquire a residential property, in which cases authorisation is required and which restrictions apply. In force since 1 January 1985, it strictly governs the conditions under which a foreign national or a foreign company may buy a property in Switzerland.

For any investor or owner considering the purchase of an apartment, a villa or a buy-to-let investment in Switzerland, particularly in Geneva and in the prestige residential segment, one question arises immediately: am I subject to this law, and under what conditions can I carry out my project? The answer depends on your nationality, your residence permit, your actual domicile, the type of property concerned and the exceptions provided for by Swiss law.

The Federal Council plays a central role in the development of this legislation. A tightening of the Lex Koller was put out to consultation from 15 April to 15 July 2026, with the stated aim of strengthening restrictions on certain purchases; the new measures are intended to come into force in 2027. Here you will find the essentials to understand the definition and purpose of the Lex Koller, identify the persons and properties concerned, recognise the exceptions, follow the authorisation procedure and assess the practical impact of these rules on the Geneva property market.

History and objectives of the Lex Koller federal law

The wish to limit the purchase of property in Switzerland by non-residents is nothing new. As early as 1961, the Lex von Moos set out the first restrictions, before being replaced by the Lex Friedrich, then by the LFAIE in its current form, which came into force on 1 January 1985 and has been revised several times (notably around 1997)

The key points of this development:

• Initial objective: to protect the Swiss property market against foreign speculation and to limit what the legislator called the “foreign over-ownership of land”, particularly in tourist regions, mountain resorts and highly sought-after lakeside municipalities.
• Protection of the territory: the law reflects a political consensus in favour of protecting the landscape and controlling urban development in Switzerland.
• Federal law, cantonal implementation: although the LFAIE is a federal law on the acquisition of real estate by persons abroad, each canton, from Bern to Geneva and Appenzell Ausserrhoden, has its own implementing guidelines.
• Recent debates: after attempts to repeal it, the Federal Council is instead considering strengthening the Lex Koller to require more authorisations for property purchases, in response to the housing shortage and rising prices in sought-after regions.

Who is considered a “person abroad” under the Swiss Lex Koller?

This is the essential question every buyer must ask. Within the meaning of the law, persons abroad include, depending on their nationality, their status in Switzerland and the various states concerned:

• Nationals of third countries (outside the European Union and EFTA) domiciled abroad or without a settlement permit (C permit).
• EU/EFTA nationals who do not have their actual domicile in Switzerland.
• Legal entities with their registered office abroad, or those based in Switzerland but controlled by persons abroad

By contrast, the following are in principle not subject to the Lex Koller:

• Swiss citizens and dual nationals.
• Citizens of the European Union or EFTA with a C permit, who may buy without restriction.
• Foreign nationals holding a Swiss residence permit, who are treated as residents for property purchases in many situations.

Borderline cases to watch: holders of L permits or certain B permits without a right of settlement; the importance of actual domicile versus tax domicile, as the authorities also examine the real centre of life in Switzerland; and the distinction between a purchase as a main residence and a buy-to-let investment. Where the acquisition is made through companies or asset-holding structures, it is the ultimate beneficial owner who determines whether the law applies.

Which properties are covered by the federal law on the acquisition of real estate?

The Lex Koller does not apply to all types of property. Here is the fundamental distinction:

Subject to authorisation:

• Apartments, houses and villas for residential use
• Second homes and holiday homes
• Land intended for housing construction

Not subject in principle:

• Commercial properties do not require purchase authorisation: offices, shops, hotels, production premises, warehouses (where the buyer operates the business themselves; the 2026 reform proposal aims to exclude acquisitions made purely as investments).
• Land zoned for industrial or commercial use.

The question becomes more complex for mixed-use properties. If the residential part exceeds certain thresholds, authorisation is still required. The cantonal authority and the municipality assess the actual use of the property and the local zoning plan before granting any authorisation.

Practical examples in Geneva: a luxury apartment in the Old Town is subject to the Lex Koller if the buyer is a person abroad. So is a lakeside villa intended as a residence. By contrast, office space in the city centre does not require authorisation, even for a foreign buyer, subject to the rules on owner-operation and the reform proposal concerning acquisitions made purely as investments.

Exceptions and exemptions from the Lex Koller

Despite its restrictive nature, the law provides for several major exceptions:

• Main residence: foreign nationals living in Switzerland with an appropriate permit (C permit, or B permit in certain cases) may acquire their residence without authorisation. The reform proposal, however, would make the purchase of main residences by nationals of third countries (outside the EU/EFTA) subject to authorisation, with an obligation to resell within two years in the event of moving or a change of use.
• Commercial properties: the acquisition of buildings used exclusively for commercial or trade purposes is not subject to the LFAIE where the buyer operates the business themselves. The reform proposal aims to exclude acquisitions made purely as investments (letting or leasing).
• Permanent establishments: a foreign company actively operating an establishment in Switzerland may acquire premises for the purposes of that operation.
• Inheritance and family transfers: no authorisation is required in the case of statutory inheritance or a purchase by relatives in the direct line (ascending or descending), or by a spouse or registered partner.
• EU/EFTA cross-border commuters: EU/EFTA nationals working in Switzerland may acquire a second home in the region of their place of work without authorisation.

Holiday homes are subject to a specific regime:

• The purchase of holiday homes is limited to 1,500 per year at federal level, divided into cantonal quotas (current regime). The reform proposal would reduce this national quota to 600 units per year, with a reserve of 150 units.
• Holiday homes are exempt in certain cantons depending on available quotas and local practice.
• The Lex Koller limits the purchase of second homes to 200 square metres of net living space, with a plot limited to 1,000 m² depending on cantonal practice.
• Restrictions on letting and resale apply.

Regarding financial vehicles: property companies listed on the Swiss stock exchange fall outside the Lex Koller, as do Swiss real estate investment funds supervised by FINMA, under certain conditions (units listed and regularly traded). However, the 2026 reform proposal would no longer generally allow persons abroad to acquire shares in listed residential property companies or regularly traded units in real estate funds and real estate SICAVs.

The Lex Koller and legal entities (companies, funds, investment structures)

Foreign legal entities are fully covered by the Lex Koller. The key rules:

• A company is considered “abroad” if its registered office is outside Switzerland, or if persons abroad hold a significant share of the capital or voting rights (typically one third or more). This is referred to as “foreign control”.
• Any direct acquisition of residential property in Switzerland by such a company requires authorisation under the LFAIE.
• Indirect acquisition, for example the purchase of shares in a property company owning housing in Switzerland, is also covered above certain shareholding thresholds.
• Listed or publicly available real estate investment funds still benefit from specific treatment, but the proposal under consultation would restrict these exemptions for listed shares in residential property companies and regularly traded units in real estate funds and real estate SICAVs.

For institutional investors and high-end private investors, it is essential to check the compliance of each investment vehicle before any transaction.

Impact of the Lex Koller on the Swiss property market and on Geneva

What is the real effect of this law on the market? Several points deserve careful reading:

• The Lex Koller curbs demand from foreign buyers for residential properties bought as investments, but rising prices are driven mainly by domestic demand and the limited supply of housing.
• Second homes bought by foreign nationals are subject to quotas, which reduces pressure in mountain resorts and lakeside regions, but does not resolve the structural shortage.
• In Geneva, the property market is extremely tight. Prestige supply remains scarce, and local and international demand is strong. The Lex Koller plays a limited but real role for prestige properties sought by persons abroad.
• According to UBS analyses, foreign nationals without a settlement permit have, on the whole, only a limited influence on the Swiss owner-occupied housing market; the impact of the proposed measures on overall prices would be modest.

On 15 April 2026, the Federal Council opened a consultation procedure (closed on 15 July 2026) aimed at a significant tightening. Among the measures considered: an obligation to resell within two years in the event of moving or a change of use for third-country nationals acquiring a main residence, a ban on acquiring commercial properties purely as investments, a reduction in holiday home quotas (from 1,500 to 600 units per year), and removal of the exemption for listed shares in residential property companies and regularly traded units in real estate funds. The stated aim is to curb speculation and protect the market, but many experts consider the impact on the housing shortage to be limited.

Authorisation procedure for the acquisition of real estate by persons abroad

In practice, how does an application for authorisation work? Here are the key steps:

1. Identify the competent authority: each canton has a dedicated office (land registry office, Lex Koller authorisation office). In Geneva, the application is handled by the competent cantonal department.
2. Submit the application before the final signing of the deed of sale at the notary. Foreign nationals must obtain authorisation to buy in Switzerland: without this prior step, the transaction may be declared null and void.
3. Provide the required documents: proof of identity, residence permit, proof of domicile, description of the property (type, size, use), sale contract, financing plan.
4. Processing times: allow several weeks, sometimes a few months depending on complexity. An appeal is possible if the application is refused.
5. Consequences of an acquisition without authorisation: nullity of the deed, administrative penalties, an obligation to resell within a set period.

Coordinating financing and procedure: Swiss banks systematically check the buyer’s regulatory status. If authorisation is not obtained or is delayed, mortgage financing may be blocked. Preparation in advance is therefore essential to avoid any delay in acquiring a prestige property.

The added value of an experienced agency lies precisely in this coordination: managing the entire process with notaries, banks, lawyers and cantonal authorities, so that each step keeps to the transaction timetable.