As a Foreign Citizen Living in Switzerland, Can I own a Property?
It is well known that Switzerland has strict regulations on foreign citizens purchasing homes. The 1983 Swiss Federal Act on Acquisition of Real Estate by Persons Abroad (commonly referred to as the Lex Koller) places hard restrictions on the acquisition of Swiss residential and other non-commercial real estate by non-Swiss persons. Whereas some countries allow fairly unrestricted purchasing of properties by non-nationals, Switzerland imposes limits on the number, location, use, and even type of property that can be acquired, and the visa types which must be held to do so.
Taking a wider view of the Swiss property market, Switzerland has one of the lowest homeownership rates, at around 40%. This varies across the country, with rates of ownership as low as 16%% in Basel City, and 18% in Geneva. Most Swiss citizens choose to rent rather than buy, which is markedly different from countries such as the UK, where purchasing is the norm. That said, many prospective purchasers in the UK and other countries with high property price inflation, are now finding themselves priced out of the market.
In this article, we will explain the rules which apply to foreign nationals when it comes to purchasing property, whether as an investment or home to live in permanently.
Who can buy a property in Switzerland?
Property purchases in Switzerland are subject to the Lex Koller legislation in the following circumstances:
- If the purchaser is classed a ‘person abroad’
- If the property qualifies both with regard to its use and type
According to the Lex Koller, a ‘person abroad’ (i.e. to whom limits on purchasing in Switzerland applies) includes:
- A person who is resident or domiciled abroad
- A person who is living as a temporary resident in Switzerland and are neither nationals of an EU/EFTA member states nor holders of a valid permanent residence C permit (i.e. a settlement permit).
As such, non-resident foreigners and holders of other permit types such as a resident B permit or short-term L permit will be subject to specific restrictions and may need to request permission to purchase the property. Where restrictions do apply, the criteria which are taken into consideration when deciding whether to grant permission to allow a purchase can vary from canton to canton. Applications must be made to the relevant Cantonal office.
Which regions allow foreign property purchases?
The rules on purchasing property under Lex Koller differs from region to region. In general, the most southerly cantons of Vaud, Valais, Fribourg, Bern, Neuchâtel, Ticino and Graubünden, are more open to foreign buyers. The most northerly cantons of Basel, Aargau, Zurich, Thurgau, and Jura tend to be the most restrictive.
On which property types are there restrictions on purchasing?
Under Lex Koller, ‘persons abroad’ have to obtain a permit to purchase the non-commercial property (e.g. residential property), but not for commercial real estate for business activity.
In terms of residential property, it may be possible for citizens living in Switzerland who are from non-EU or EFTA countries and do not hold a C permit (i.e. a B permit holder) to buy a one-family house or flat (or piece of land to which to build a single dwelling in which they will live) in their place of residence without having to obtain authorisation.
In general, if you are classed as a person abroad, you will need permission to purchase a second home or holiday home. EU/EFTA nationals who commute to Switzerland for work (G permit holders), can purchase a second home in the canton in which they work without needing to request permission.
The purchasing of holiday homes is strictly controlled in Switzerland. Such transactions are typically only allowed in areas which are designated as Swiss holiday resorts, and will typically have strict caps on the number of properties that can be purchased. As a way of controlling the use of holiday homes, such properties can only be leased on a periodic basis, and not annually – hence preventing the misuse of holiday homes as normal long term rental properties.
Purchasing in Swiss ski resorts is restricted by area. In the canton of Bern, no more than half of all apartments in a single building can be sold to foreigners, and there are further specific restrictions in each resort – e.g. in Wengen, foreigners can only purchase apartments and cannot purchase detached chalets. Other areas such as the very popular resort of Zermatt do not allow foreign property buyers. As such, if you are considering purchasing a ski apartment or chalet in any Swiss resort, it is essential that you check the cantonal and resort restrictions that apply before proceeding with a purchase. Property size restrictions also tend to apply.
While there are some restrictions on foreign property buyers, it is possible to purchase if you meet the criteria for your area of interest. In some cases, if you are unable to proceed in your preferred location, you may be able to gain permission in an adjoining canton. As such, some flexibility may be needed to achieve your dream of owning in Switzerland.
If you are considering purchasing a property in Switzerland, it will be essential to do your homework first. If you are considering purchasing, a house, flat, or piece of land, it is first advisable to contact the land registry office or inspectorate in the canton in which you are planning to purchase. They will be able to confirm whether you meet all of the necessary requirements or if you should obtain a permit before proceeding. In some cases, you will not need to apply for permission, saving you considerable time and cost. We wish you the very best with your property purchase in Switzerland.