Lex Koller and Lex Friedrich — restrictions for foreign property buyers in Switzerland
What do Lex Koller and Lex Friedrich mean? - The definition
Die Lex Koller and its predecessor, the Lex Friedrich, are Swiss regulations that limit the purchase of real estate by foreign nationals. These regulations are based on the “Federal Act on the Acquisition of Land by Persons Abroad” (BewG) and the associated ordinance (BewV). The term Lex Koller was created when Federal Councillor Arnold Koller significantly amended the law in the 1990s and replaced the previous Lex Friedrich. The main purpose of the law is to protect Swiss real estate markets from excessive demand and to keep land prices stable for locals.
The origin and development of Lex Koller
Since the 1960s, Switzerland has been pursuing the strategic goal of controlling foreign investments in the residential real estate market. Originally, economic upturn and housing shortages provided for an initial regulatory approach, as the cantons feared rising prices and crowding effects on the real estate market as a result of foreign capital influence. first version of the BewG Bye, the Lex Friedrich. After various parties advocated an easing, the restrictive Lex Koller in 1997 through. Since then, there have been attempts to repeal it, but these have been rejected due to concerns about too dynamic real estate prices.
Scope and regulations of Lex Koller
The BewG determines which forms of purchase require a permit. Foreign nationals who are not resident in Switzerland, i.e. citizens of EU/EFTA countries without residence permit B or C as well as Citizens of third countries without a permanent residence permit C, must obtain approval from the cantonal authorities to purchase real estate. Transactions subject to approval include:
- Acquisition of residential property and building rights
- Shares in real estate companies
- Purchase, pre-purchase and repurchase rights
undertakings, whose majority owners are not Swiss nationals or whose administrative headquarters are not in Switzerland, are also subject to Lex Koller.
Exception: The acquisition of commercial and investment real estate by foreign buyers is permitted, provided that the property is not used for residential purposes. Foreigners with a valid residence permit (B or C) are exempted from the regulations and may freely purchase real estate for their own use.
Effects and exemptions of Lex Koller
Thanks to Lex Koller, the residential property market remains largely in Swiss hands. Among other things, this has the advantage that price increases for local buyers are slowing down and the real estate markets remain more stable. The Lex Koller allows exemptions for holiday apartments in regions relevant to tourism, but for which contingents apply. In these cases, the Second Home Ordinance also applies, which also regulates the construction and sale of second homes.
The regulations are handled individually by the cantons, and the respective canton decides whether to approve or reject an application.
Tip: Before buying real estate in Switzerland, you should refer to a leaflet from the Swiss authorities to find out about your specific options and restrictions.
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