On 15 April 2026, the Swiss Federal Council launched a consultation on a draft revision of the Federal Act on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents, also known by its initials LFAIE or more commonly as the “Lex Koller”. With Switzerland currently affected by a shortage of available housing, the proposed reform aims to refocus the legislation on its original purpose: limiting foreign ownership of Swiss real estate while easing pressure on an increasingly strained property market.
The first key part of the reform would reintroduce stricter authorisation requirements. At present, nationals of countries outside the EU and EFTA who are settled in Switzerland – in practice, holders of a permanent residence permit (Permit C) – are allowed to acquire a primary residence without restriction. Under the draft legislation, third-country nationals who do not hold settled status would once again require authorisation to purchase a primary residence. If they subsequently leave Switzerland, they would be required to sell the property within two years. The measure is intended to prevent purchases that are presented as owner-occupied homes but are in reality investment acquisitions.
The second pillar of the reform targets real estate investments made solely for financial purposes. Foreign investors would continue to benefit from an exemption for the acquisition of commercial property, but only where they operate the business themselves. Passive investments, including buy-to-let properties, would in principle no longer qualify. The Federal Council also proposes extending the requirement for authorisation to include listed real estate companies, real estate funds, and SICAVs. In practice, this would amount to a near-ban on foreign investment in these vehicles.
Holiday homes would also face tighter regulation. The annual national quota would be cut by half (from 1,500 to 750 units), whilst every holiday home purchase, including transactions between foreign persons, would count towards cantonal quotas.
One targeted relaxation is proposed for the hospitality sector. Cantons would be able to authorise the purchase of staff accommodation without a permit, ensuring hotels and similar businesses in popular tourist regions are able to recruit staff more easily.
Taken together, the proposals reflect a clear political will to make the Swiss property market less attractive for foreign capital. Whilst the reform’s stated aim of tackling housing shortages is entirely legitimate, questions remain about its likely impact. In some regions, foreign acquisitions account for only a small share of the market. At the same time, the measures do little to address the structural causes of the shortage, which include restrictions on higher-density housing development, lengthy planning and approval procedures, and broader land-use constraints. The reform could also deter productive investment and create greater legal uncertainty for international investors, without delivering a meaningful reduction in housing costs or a significant increase in supply.
09 June 2026
By Quentin Bärtschi, Kellerhals-Carrard Gstaad – Switzerland
