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Switzerland's Federal Council has proposed stricter regulations on real estate purchases by foreign nationals, particularly targeting buyers from outside the EU and EFTA. The draft amendments to the Lex Koller law introduce permit requirements for primary residences, mandatory resale conditions and restrictions on investment-driven acquisitions. The proposals are currently under public consultation until mid-July and are aimed at addressing housing shortages and rising immigration pressures. Additional measures include curbs on holiday home purchases and limits on commercial property acquisitions for rental purposes. The move reflects policy efforts to regulate foreign participation in the housing market amid concerns over affordability and infrastructure strain.
Switzerland's Federal Council has proposed amendments to tighten rules governing real estate purchases by foreign nationals, with the measures introduced in the past week as part of efforts to address housing shortages and rising pressure on urban infrastructure. Advertisement
The proposed changes seek to revise the existing Lex Koller framework, which regulates foreign ownership of Swiss real estate. The government has initiated a consultation process on the draft amendments, with feedback invited until mid-July before any legislative action is taken.
Under the proposals, nationals from countries outside the European Union and the European Free Trade Association would be required to obtain permits to purchase primary residences in Switzerland. Additionally, such buyers would be mandated to sell their property within two years if they leave the country, introducing a time-bound ownership condition.
The draft also includes restrictions on commercial real estate acquisitions. Foreign buyers would be barred from purchasing properties solely for rental or investment purposes, with exemptions limited to owner-occupied business use. This marks a shift from earlier provisions where certain commercial investments were permitted with fewer restrictions.
Further, the proposals aim to tighten rules governing holiday homes and second residences. This includes reducing cantonal quotas for foreign ownership and introducing stricter resale conditions, including counting transactions between foreign buyers within quota limits.
The policy initiative is linked to broader concerns over housing availability and demographic pressures. Switzerland has experienced sustained demand for housing driven by economic growth, high living standards and immigration, leading to constraints in supply and rising property prices.
The move also coincides with a national referendum scheduled in the coming months, which seeks to cap the country's permanent population at 10 million by 2050. While the government has opposed the proposal, the tightening of real estate rules is positioned as part of a broader policy response to concerns around population growth and infrastructure capacity.
Currently, foreign property ownership in Switzerland is already subject to regulatory oversight, with non-residents facing limitations under the Lex Koller law. The proposed amendments aim to reinforce these controls and refocus the framework on restricting speculative demand from overseas buyers.
Industry observers indicated that the changes, if implemented, could affect demand patterns in Switzerland's residential and commercial real estate markets, particularly in regions that have historically attracted foreign investment. The introduction of permit requirements and resale conditions may also increase transaction timelines and compliance requirements for international buyers.
The proposals remain at a consultation stage, and final provisions will be subject to legislative approval. If enacted, the revised framework is expected to significantly tighten foreign participation in Switzerland's property market while aligning housing policy with broader demographic and infrastructure considerations.
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