What is Lex Koller and why does it exist?

The Lex Koller (officially the Federal Act on the Acquisition of Real Estate by Persons Abroad) is one of the most significant legal frameworks governing the Swiss property market. Enacted to prevent foreign speculation, control property prices, and ensure that residential real estate remains accessible to local residents, it places strict limitations on who can buy land and residential property in Switzerland. For expats moving to Switzerland, understanding this law is essential, as your nationality, residence permit, and intended use of the property dictate what you can and cannot buy.

Under Lex Koller, a 'person abroad' is defined as any individual who does not have legal Swiss residence for tax purposes, as well as foreign corporations or Swiss-registered companies controlled by foreigners. The law primarily targets residential properties, holiday homes, and undeveloped land. It is important to note that commercial properties — such as offices, retail spaces, warehouses, and factories — are completely exempt from Lex Koller restrictions. Foreigners can purchase Swiss commercial real estate without any special authorization or residency requirements.

The restriction on residential property means that if you do not meet specific residency criteria, you cannot buy an apartment or house to live in or rent out without obtaining a special permit from the cantonal authorities. These permits are subject to tight quotas and strict conditions. However, the Swiss government provides several pathways and exemptions for residents holding valid permits, making homeownership a realistic goal for many expats who settle in the country long-term. To evaluate whether purchasing is financially superior to renting in your case, read our comprehensive buy vs rent analysis.

Buying property with a Swiss residence permit (B and C permits)

Your rights as a buyer within Swiss borders depend heavily on your nationality and the type of residence permit you hold. If you are a citizen of an EU or EFTA country and hold a valid B residency permit (resident) or C permit (permanent resident), you are treated exactly the same as a Swiss citizen under Lex Koller. You do not need any legal authorization to buy residential property, whether it is for your principal residence, a secondary home, an investment property, or undeveloped land. You can buy freely and rent out the home as you see fit. Note that owning property will affect your annual tax obligations, which you should verify in our Swiss wealth tax guide.

For citizens of third countries (countries outside the EU/EFTA, such as the UK, US, Canada, or India), the rules are more restrictive. If you hold a C permit, you enjoy full equality with Swiss citizens and can purchase any type of property without restriction. However, if you hold a B permit, you are only allowed to purchase one property, which must serve as your primary, permanent residence. You must live in the home yourself, and you are legally prohibited from renting it out, even partially (for example, renting a room or subletting while traveling).

Furthermore, if you are a third-country B-permit holder buying a main home, the transaction is registered with the land registry (Grundbuch) with a specific restriction noting that it is for personal use. You do not need a formal permit under Lex Koller, but the land registry will verify your residency status and the contract before finalizing the transfer. If you plan to buy land to build a permanent home, you must commence construction within one year of purchasing the land to comply with the regulations.

Rules for L permits, G permits, and non-residents

Expats holding a short-term L permit face the most significant barriers. Because the L permit is designed for temporary stays (usually up to one year), holders are classified as 'persons abroad' under Lex Koller. As a result, you cannot purchase residential property locally. L-permit holders must wait until they transition to a B residency permit before they can acquire a permanent home. Exceptions are virtually non-existent, and cantonal authorities will not issue permits for residential purchases to temporary residents.

Cross-border commuters holding a G permit (Grenzgänger) have a unique status. G-permit holders who are EU/EFTA citizens are allowed to purchase a secondary residence locally, but it must be located in the same region where they work, and it must be used exclusively for personal lodging during their workweek. You cannot rent out this secondary residence, and you cannot buy it as an investment property. If a G-permit holder wishes to buy a main home, they must first relocate their main domicile to Switzerland and obtain a B permit.

For complete non-residents (individuals who do not live or work in Switzerland), buying residential property is heavily restricted. Non-residents can only buy holiday homes in designated tourist areas, and these purchases are subject to annual quotas distributed among the cantons. Furthermore, a holiday home purchased by a non-resident cannot be rented out on a long-term basis; it can only be rented out temporarily to tourists. The property must also adhere to size limits, typically capped at 200 square meters of net living space and 1,000 square meters of total land area.

The 'primary residence' requirement and rental restrictions

The requirement that a property must serve as a primary residence for B-permit holders from third countries is strictly enforced in Switzerland. If you purchase a property under this exemption, you must register your address at the residence with the local commune (Gemeinde) and use it as your main domicile for tax purposes. You cannot buy a property in Zurich while living and working in Geneva, nor can you buy a house to use merely as a weekend home while renting an apartment elsewhere.

Rental restrictions are absolute for third-country nationals holding a B permit. You cannot rent out the home to third parties. If you buy a two-family house (Zweifamilienhaus), you cannot live in one unit and rent out the other; doing so violates Lex Koller because the rented unit is classified as an investment property. Subletting rooms on platforms like Airbnb is also a violation. If you violate these rules, you face severe legal consequences, including heavy fines, voiding of the purchase contract, and potentially being forced to sell the real estate at a loss.

If your household situation changes — for example, if you get married or have children and need a larger home — you are allowed to buy a new principal residence. However, you must sell your original home within a reasonable timeframe (typically within one year of moving into the new property) or rent it out only after securing a C permit or Swiss citizenship. The local land registry monitors these transactions to ensure compliance with the owner-occupancy mandate.

What happens to your property if you leave Switzerland?

A common concern for expats is what happens to their property if they permanently leave Switzerland or lose their residence permit. If you are an EU/EFTA citizen holding a B or C permit, or a third-country citizen with a C permit, you are legally permitted to keep your property if you move abroad. You do not have to sell it. You can keep it as a secondary home, use it as a holiday home, or rent it out to tenants. However, you will remain subject to Swiss income tax on the rental income and wealth tax on the asset value, and you must file a Swiss tax return.

For third-country citizens who bought a main home with a B residence permit, leaving Switzerland permanently changes your legal status. Because you no longer maintain a permanent Swiss home, you no longer meet the conditions under which the home was acquired. Technically, you are required to sell the asset before or shortly after your departure. In some cases, if you can prove temporary relocation (for example, a two-year overseas posting by your Swiss employer with a guaranteed return), you may apply to the cantonal Lex Koller office for a temporary exemption to rent out the dwelling.

However, if your relocation is permanent, the canton will expect you to sell the home. Retaining the residence without a valid residence permit and using it as a holiday home or rental property without explicit cantonal authorization is a violation of Lex Koller. To ensure a smooth transition and avoid legal complications, expats planning to relocate should consult a detailed financial exit checklist and engage a local real estate attorney to manage the real estate sale in compliance with federal laws.