Swiss Real Estate Laws and Regulations You Need to Know

Published on October 1, 2025 and written by Cyril Jarnias

Switzerland, with its economic and political stability, attracts numerous foreign investors eager to acquire real estate. However, the Swiss real estate market is governed by complex laws and regulations that may seem intimidating to the uninitiated. This article will guide you through the main legal and tax provisions you need to know before embarking on your real estate adventure in Switzerland.

Buying Property in Switzerland: A Dream Accessible to Foreigners?

Contrary to popular belief, it is entirely possible for foreigners to acquire real estate in Switzerland. However, this possibility is subject to strict rules, particularly the famous Lex Koller, a federal law governing the acquisition of property by persons abroad.

Purchase conditions vary depending on the buyer’s status:

• EU/EFTA nationals residing in Switzerland (B or C permits) can purchase without major restrictions
• Cross-border workers (G permits) can acquire a secondary residence near their workplace
• Non-residents can purchase a secondary residence in certain tourist areas, subject to quotas

It’s important to note that restrictions are stricter for the purchase of land or commercial-use properties. Furthermore, certain cantons, like Geneva and Zurich, have even more restrictive rules regarding purchases by foreigners[1][5].

The Legal Labyrinth: Main Laws to Know

The Swiss legal framework for real estate is complex and multi-level. Here are the main laws and regulations to know:

1. Lex Koller: The Guardian of Swiss Real Estate

Introduced in 1983, Lex Koller (Federal Act on the Acquisition of Real Estate by Persons Abroad) aims to limit the purchase of real estate by foreigners to prevent excessive speculation. It imposes restrictions on:

• The type of property that can be purchased
• The use of the property (primary residence, secondary residence, investment)
• The land area (generally limited to 3000-3500 m² for villas)

2. The Code of Obligations: The Bible of Contracts

This code governs all contractual aspects of real estate purchases, including sales and rental agreements. It defines the rights and obligations of the parties involved in a real estate transaction.

3. The Spatial Planning Act (SPA)

This federal law regulates land use and directly influences construction and renovation possibilities. It aims to promote sustainable development of Swiss territory.

4. Cantonal Laws

Each canton has its own real estate laws and regulations, which can be more restrictive than federal legislation. It is crucial to inquire about the specifics of the canton where you wish to invest[1][3].

Swiss Real Estate Taxation: A System Unique in Its Kind

Real estate taxation in Switzerland is known for its particularity: the imputed rental value. This concept, unique in the world, requires owners to declare a fictitious income corresponding to the rent they would have received if they had rented out their property. However, significant changes are underway.

Imputed Rental Value Reform: A Historic Turning Point

After years of debate, the Swiss Parliament finally decided in 2024 to abolish the imputed rental value. This reform, if approved by referendum, will bring major changes:

• Elimination of imputed rental value for primary and secondary residences
• Reduction of tax deductions for maintenance and mortgage interest
• Possible introduction of a cantonal tax on secondary residences

This reform could make real estate ownership more attractive, particularly in the current context of low interest rates[6][7].

Other Aspects of Real Estate Taxation

• Wealth tax: Real estate properties are included in the wealth tax calculation, with rates varying by canton.
• Transfer taxes: When purchasing a property, transfer taxes (or notary fees) are due, generally ranging between 1% and 3% of the purchase price.
• Real estate gains tax: If sold at a profit, a tax on the realized gain is levied, with degressive rates depending on the duration of property ownership.

Property Owners’ Rights: Between Protection and Responsibilities

In Switzerland, property owners’ rights are generally well protected, but they also come with significant responsibilities.

Property Protection

The Swiss Constitution guarantees the right to property. Owners benefit from strong legal protection against unjustified expropriations and intrusions. However, this right can be limited by laws in the public interest, such as those on spatial planning.

Rights and Obligations Regarding Rental

If you decide to rent out your property, you must know your rights and obligations as a landlord:

• Right to freely set the initial rent, but with restrictions on subsequent increases
• Obligation to maintain the property and perform necessary repairs
• Right to terminate the lease, but with valid reasons and while respecting legal deadlines

Environmental Responsibilities

Swiss property owners have increasing environmental responsibilities. Many cantons impose strict energy standards for new constructions and major renovations[2][9].

Regulatory Changes: Towards a More Sustainable Real Estate Market

The regulatory landscape of Swiss real estate is constantly evolving, with a marked trend towards sustainability and energy efficiency.

New Energy Standards

Many cantons have adopted stricter regulations regarding building energy efficiency. For example, some cantons now require new buildings to be nearly energy self-sufficient.

Real Estate Tax Reform

Besides the planned abolition of the imputed rental value, other tax changes are under discussion:

• Modification of tax deductions for energy renovations
• Possible introduction of new taxes on secondary residences in certain cantons

Evolution of Lex Koller

Discussions are underway to ease some Lex Koller restrictions, particularly to facilitate foreign investments in commercial real estate[2][7].

Conclusion: An Attractive but Complex Market

Swiss real estate offers great opportunities for foreign investors, with a stable market and potentially interesting returns. However, the complexity of the legal and tax framework requires a cautious and well-informed approach.

The main keys to succeeding in your real estate investment in Switzerland are:

• A good understanding of Lex Koller and the restrictions applicable to foreigners
• An in-depth knowledge of real estate taxation, which is constantly evolving
• Particular attention to cantonal regulations, which can vary considerably
• Monitoring of new environmental and energy standards

With these elements in hand and the help of local professionals, you will be well equipped to navigate the Swiss real estate market and seize the opportunities it offers.