Lex Koller 2026: Switzerland Proposes New Restrictions on Property Purchases by Foreigners

What is the Lex Koller?

Not everyone can buy property in Switzerland freely. Since 1983, a federal law (known as the "Lex Koller") has set specific rules for people who do not live in Switzerland or who come from countries outside the European Union. The original aim was to prevent foreign capital from taking over the Swiss property market at the expense of residents.

In practice, the law was gradually relaxed over the years. Certain categories of property, such as commercial buildings or shares in listed real estate funds, had become accessible to foreign buyers without any particular restriction. That is precisely what the Federal Council now wants to change.

Why Change the Rules Now?

Switzerland is facing a severe housing shortage, particularly acute in major cities like Geneva, Zurich, and Lausanne, where rents have risen sharply in recent years and finding an available flat has become increasingly difficult. The government believes that property purchases by foreign investors are contributing to this market pressure, by drawing housing away from residents.

The timing is also significant: in two months, Swiss voters will decide on the UDC initiative "No Switzerland of 10 Million", which raises concerns about demographic pressure and its effects on housing. The Federal Council is presenting this draft law as a concrete response to the problem, independent of the vote outcome.

What the Federal Council Is Proposing

For primary residences, nationals from countries outside the EU and EFTA (Norway, Iceland, Liechtenstein) would need formal authorisation before buying a home in Switzerland. Currently, those who legally reside in Switzerland can buy without restriction. A further new rule would require any foreign owner who leaves Switzerland permanently to resell their property within two years.

For rental and commercial buildings, a foreign investor would no longer be able to purchase a commercial property simply to rent it out to third parties. Only a buyer who operates the building themselves for their own business activity would be exempt from the authorisation requirement. This measure is aimed at discouraging purely speculative property investment.

For holiday homes, chalets and holiday flats are already subject to cantonal quotas. The Federal Council proposes to reduce these further, and to require authorisation even when a foreigner sells their holiday property to another foreigner, something which until now has been unrestricted.

For financial investments, it was previously possible for a foreign investor to purchase shares in Swiss residential property companies listed on the stock exchange, or units in real estate investment funds, without any restriction. The Federal Council intends to end this exemption.
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Important: This is not yet law. The draft is currently open for consultation: cantons, political parties, and economic stakeholders can submit their views until 15 July 2026. The text will then be revised before being submitted to Parliament. Changes are therefore possible.

Who Is Affected, and Who Is Not?

The vast majority of foreigners living in Switzerland come from EU or EFTA countries (France, Germany, Italy, Portugal, etc.). These people would not be affected by the new restrictions on primary residences, thanks to the bilateral agreements that guarantee their free access to the Swiss property market. The targeted measures would primarily apply to nationals of third countries, outside Europe, and to investors based abroad.

For Geneva property owners considering selling to foreign buyers, or for investors who structure their purchases through property companies, these changes are worth monitoring closely. Current market conditions could shift if the law is adopted.

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