Switzerland places strict limits on foreign property ownership. The federal statute known as Lex Koller (BewG) prevents most non-residents and certain foreign nationals from buying Swiss residential real estate without prior cantonal authorisation — which is very rarely granted. Whether you can buy at all depends entirely on your residence status, permit type, and intended property use. This guide sets out the rules as they stand in 2026, with the real traps that catch foreign buyers.
The Central Restriction: Lex Koller
The legal basis is the Bundesgesetz über den Erwerb von Grundstücken durch Personen im Ausland (BewG), universally known as Lex Koller. The full text is on fedlex.admin.ch.
The law prohibits “persons abroad” from acquiring Swiss residential real estate without cantonal authorisation. Authorisations for residential property outside the holiday apartment quota are extremely rare. For a detailed treatment of the statute, see our dedicated guide to Lex Koller Switzerland.
Who Can and Who Cannot Buy
| Buyer Category | B Permit | C Permit | No Swiss Permit |
|---|---|---|---|
| Swiss citizen | Exempt | Exempt | Exempt |
| EU/EFTA national | Primary residence in permit canton — no authorisation | Unrestricted | Subject to Lex Koller |
| Non-EU national | Primary residence in permit canton (narrower exemption) | Unrestricted | Subject to Lex Koller |
Key distinctions:
- C permit holders (any nationality) are treated equivalent to Swiss citizens for property acquisition
- EU/EFTA B permit holders can purchase their primary residence in their canton without authorisation
- Non-EU B permit holders have a narrower exemption — legal advice before proceeding is essential
- Non-residents without a Swiss permit are subject to Lex Koller for residential property; only the holiday apartment quota exception applies
For those building towards Swiss residency, our guides on the B permit and how to immigrate to Switzerland cover the permit progression.
Case Study: South African Investor and the Two-Property Strategy
A South African investor based in Johannesburg wanted exposure to Swiss real estate. He had no Swiss residence permit and no plans to relocate personally. Under Lex Koller, residential property was off-limits.
The first property — commercial: His Swiss holding AG acquired a small commercial property in Zug for genuine business use (office space for the company’s Swiss operations). This was fully permissible — Lex Koller explicitly exempts commercial property acquired for business purposes. The acquisition was structured through the AG, which was advised on substance requirements to ensure the property genuinely served a business function.
The residential question: The investor asked about purchasing a lakeside apartment in Zurich as a personal investment. The answer was straightforward: not possible without cantonal authorisation (which would not be granted for a non-resident making an investment purchase). The holiday apartment quota in the Zurich canton was not relevant — Zurich is not a designated tourist zone.
The path forward: The investor was advised that residential property would become available if he obtained Swiss residence. The route: apply for a B permit (potentially as a beneficial owner of his Swiss AG, with appropriate economic substance), then purchase a primary residence in the permit canton. Non-EU nationals on a B permit should confirm the scope of their exemption with legal counsel before proceeding.
The outcome: The commercial property was acquired cleanly. The residential property question was deferred to the immigration timeline. The investor understood that Swiss residential real estate requires Swiss residence — there is no shortcut.
Five Traps That Catch Foreign Property Buyers
1. Retroactive annulment of Lex Koller violations. A purchase in breach of Lex Koller is void. The land register entry is deleted, the property must be divested, and criminal penalties apply. This can happen years after the original purchase — during resale, inheritance dispute, or audit. The property is never “safe” if the original acquisition was non-compliant.
2. The corporate wrapper illusion. BewG Article 5 looks through Swiss companies to the beneficial owner. Holding residential property inside an AG or GmbH with foreign shareholders does not create an exemption — it typically generates additional compliance exposure.
3. The EU/non-EU B permit gap. The exemption available to EU/EFTA B permit holders does not automatically extend to non-EU nationals on the same permit type. This distinction is frequently misunderstood.
4. Registered address change after property purchase. If you change your registered address to a different canton after purchasing residential property as a B permit holder, the original property may no longer qualify under the primary-residence-in-permit-canton exemption. A change of domicile requires review against Lex Koller rules — and may trigger a requirement to divest.
5. Mortgage rejection for non-residents. Non-resident buyers without Swiss income face significantly higher scrutiny from Swiss banks. Do not assume financing is available — obtain a written mortgage commitment before executing any purchase deed.
The Commercial Property Exception
The most viable route for foreign buyers: BewG Article 7(1)(b) exempts commercial and industrial property acquired for genuine business use. This covers:
- Office premises for an operating Swiss business
- Industrial, warehouse, or logistics facilities
- Retail and hospitality premises operated as a business
A non-resident foreigner or foreign-owned Swiss company can acquire commercial property without triggering Lex Koller. The key qualifier is genuine business use. See our guides on company formation in Switzerland and commercial real estate in Switzerland.
Costs of Acquisition: Taxes and Fees by Canton
Property Transfer Tax (Handänderungssteuer)
| Canton | Transfer Tax Rate |
|---|---|
| Zug | 0% (no transfer tax) |
| Zurich | ~1% (notarial and registration fees) |
| Valais | ~1.0% |
| Ticino | ~2.0% |
| Vaud | ~2.2% |
| Geneva | ~3.0–3.3% |
Other Costs
- Notarial fees: 0.1–0.5% of transaction value
- Grundbuch registration: 0.1–0.3% of purchase price
- Agent commission: 2–3% (typically paid by seller)
- Total buyer costs: 3–5% of purchase price
Mortgage Financing for Foreign Buyers
Swiss banks apply conservative standards:
- Primary residence: Maximum 80% LTV; at least 10% of the 20% equity must be personal liquid assets (pension fund assets can cover the remaining 10%)
- Investment/holiday property: Maximum 65–75% LTV
- Amortisation: Mortgage must be reduced to 66.7% LTV within 15 years
- Non-residents without Swiss income: Additional scrutiny; private banks and some cantonal banks are more flexible for high-net-worth clients with substantial assets under management
Obtain a written mortgage commitment before executing any purchase deed.
Ongoing Property Taxes and Imputed Rental Income
Wealth tax: Real estate is included in taxable wealth at assessed fiscal value (typically 70–80% of market value). Mortgage debt reduces net wealth.
Imputed rental income (Eigenmietwert): Owner-occupiers are deemed to receive notional rental income equal to approximately 60–70% of market rent. This is taxed as income. Mortgage interest and maintenance costs are deductible.
Capital gains tax (Grundstückgewinnsteuer): Most cantons levy a tax on property sale gains, with rates inversely correlated to holding period: 30–40% for sales within 2 years, declining to ~10% for 20+ year holding periods.
The Transaction Process Step by Step
- Due diligence — verify Lex Koller status, confirm zoning, obtain Grundbuch extract for encumbrances
- Preliminary agreement — notarised preliminary purchase agreement (Vorvertrag)
- Financing confirmation — written mortgage commitment from lender
- Cantonal authorisation (where required under BewG)
- Notarial deed — both parties sign before a cantonal notary; transfer tax falls due
- Land Register registration — legal ownership transfers upon Grundbuch entry
Timeline: 6–12 weeks for straightforward transactions; longer where Lex Koller authorisation is required.
Frequently Asked Questions
Can a US or UK citizen buy a house in Switzerland without living there? In practice, no — not residential property. Lex Koller prevents it. The only exception is a holiday apartment in a designated tourist zone under the quota system.
Does buying through a Swiss company bypass Lex Koller? No. BewG Article 5 looks through corporate structures. A Swiss company majority-owned by non-resident foreigners is treated as a “person abroad”.
Do EU citizens face different rules to non-EU citizens? Yes. EU/EFTA B permit holders can purchase primary residence without authorisation. Non-EU B permit holders have a narrower exemption.
Can a foreigner buy commercial property? Yes. Commercial property for genuine business use is exempt from Lex Koller regardless of buyer nationality or residence.
Can a foreigner get a mortgage from a Swiss bank? Possible but harder. At least 20% equity required, 10% from personal liquid assets. Non-residents face additional scrutiny.
What is the property transfer tax? Varies by canton: Zug 0%, Zurich ~1%, Geneva 3.0–3.3%. Total buyer costs 3–5% of purchase price.
How is property recorded in the Grundbuch? Legal ownership only transfers upon Grundbuch entry. The register records title, mortgages, easements, and encumbrances. A full extract is essential due diligence.
Request a Free Assessment
Morgan Hartley and the Lawsupport team advise international clients on Lex Koller compliance, commercial property acquisition, Swiss company formation for property holding, and the full transaction process.
Lawsupport (Morgan Hartley Consulting) | Grafenauweg 4, Zug, Switzerland | +41 44 51 52 592 | [email protected]