Swiss Federal Council Proposes Sweeping Restrictions on Foreign Property Ownership to Ease Housing Crisis

The Swiss government proposes stricter Lex Koller rules, requiring non-EU/EFTA buyers to get permits for homes and sell within two years if they move.

By: AXL Media

Published: Apr 17, 2026, 6:59 AM EDT

Source: Information for this report was sourced from Keystone-SDA

A Decisive Move Against Housing Scarcity

The Swiss Federal Council has initiated a sweeping legislative overhaul aimed at curbing the influence of foreign buyers in the national real estate market. On April 15, 2026, the government announced its intention to reform the Federal Act on the Acquisition of Immovable Property by Foreign Non-Residents, known as the Lex Koller law. This intervention comes as Switzerland grapples with an acute housing shortage and soaring property prices, which have risen by more than 20% since the beginning of 2024. By tightening these regulations, Bern aims to prioritize residential access for local inhabitants over international investment interests.

Mandatory Permits for Third-Country Nationals

The most significant shift in the proposed legislation targets nationals from countries outside of the European Union and the European Free Trade Association (EFTA). Currently, many third-country citizens holding Swiss residence permits can acquire property with relatively few administrative hurdles. The new rules would mandate that these individuals obtain specific individual authorization before purchasing any primary residence. Furthermore, the proposal introduces a "use it or lose it" clause, requiring foreign owners to sell their homes within a 24-month window if they relocate or leave the country.

Cracking Down on Speculative Commercial Investment

The Federal Council is also moving to close loopholes that have allowed foreign entities to treat Swiss real estate as a high-yield investment vehicle. The draft legislation seeks to prohibit non-EU and non-EFTA nationals from purchasing commercial properties solely for the purpose of renting them out. Moving forward, exemptions for commercial real estate would be restricted to owners who directly operate their businesses from the premises. This measure is specifically designed to eliminate "buy-to-let" strategies by foreign investors that the government believes have artificially inflated the commercial and residential rental markets.