The Lex Koller: less complicated than its reputation
Many people are put off by the term "Lex Koller" back. However, the law is simply not relevant for the vast majority of foreign nationals living in Switzerland. The decisive factor is not where you come from, but what residence status you have. The Federal Act on the Acquisition of Real Estate by Persons Abroad, or Lex Koller for short, has been in force since 1983. It is intended to prevent foreign investors from unduly influencing the Swiss property market. In practice, however, it only affects a small proportion of buyers.
Who is affected and who is not?
The law makes a clear distinction: "persons abroad" are subject to the authorisation requirement, all others are not. Who is considered a "person abroad"? Put simply, anyone who lives in Switzerland but does not have a B or C permit or is an EU/EFTA citizen.
Exempt from the law and therefore free to purchase property are
- Swiss citizens, regardless of their place of residence
- EU/EFTA citizens resident in Switzerland with a valid B permit
- All persons with a C permanent residence permit, regardless of their nationality
However, anyone who comes from a third country and only has a B permit is subject to the law. This in turn leads to restrictions.
B permit or C permit
Residence status is decisive when purchasing property in Switzerland. The two most common permits for foreign nationals living in Switzerland are the B residence permit and the C permanent residence permit.
C permit: Equal status with Swiss citizens
If you have a C residence permit in Switzerland, you can purchase all types of property without restriction. This applies to main residence, holiday home, rental property or investment property. In principle, nationality is irrelevant.
The C permit is generally issued after 5 years of regular residence for EU/EFTA nationals and after 10 years for third-country nationals.
B permit EU/EFTA: Practically on an equal footing
EU and EFTA nationals with a B permit and residence in Switzerland enjoy a privileged position. Thanks to the bilateral agreements between Switzerland and the EU/EFTA, they are not subject to the restrictions of the Lex Koller. They can acquire all types of residential property. Main residence, secondary residence or investment property.
Example: A German citizen with a B permit and residence in Zurich can purchase a condominium, a detached house or even a holiday home without having to obtain a special permit.
B permit for third countries: Only the main residence is possible
There is a significant restriction for third-country nationals with a B permit: they may purchase residential property in Switzerland as long as it is used as their main residence.
| Criterion | B permit (EU/EFTA) | B permit (third countries) | C permit |
|---|---|---|---|
| Lex Koller Authorisation requirement | None - on an equal footing with Swiss citizens | Yes, but only main residence (no authorisation required for own use) | No restriction - on an equal footing with Swiss citizens |
| Main residence | Yes, without restriction | Yes, for personal use only | Yes, without restriction |
| Yield property | Yes | No | Yes |
| Holiday flat | Yes | No (depending on canton with authorisation) | Yes |
| Financing / Mortgage | Yes, with restrictions | Yes, with restrictions | Yes |
Practical note
As it can happen that a B permit is issued by mistake, even though the actual residence is still abroad, notary's offices sometimes request further documents in order to check the actual residence in detail before the purchase. For example, a confirmation of deregistration of the last foreign residence, a family register or a confirmation from the tax office that the buyers are fully (unlimitedly) liable for tax here in Switzerland.
Mortgage
In principle, people with a B or C permit and residence in Switzerland can apply for a mortgage from Swiss financial institutions. The statutory minimum requirements in terms of equity, affordability and amortisation apply equally to all buyers.
Special features for persons with a B permit
In the practice of Swiss financial institutions, there are differences depending on the residence status. While people with a C permit are generally treated in the same way as Swiss citizens, banks take a closer look at people with a B permit and carry out additional checks:
- Stability of residence status: Has the B permit only recently been issued or has it been extended for some time?
- Employment contract: Fixed-term or permanent employment? The latter is strongly favoured
- Employer: Swiss company or international company?
- Residence prospects: How credible is long-term residence in Switzerland?
- Country of origin: The required equity ratio may be higher for third-country nationals. Some institutions require up to 25 % or more
It should also be mentioned that there are financing institutions that generally do not grant mortgages to people with a B permit.
Withdrawal from tied pillar 3a and the pension fund
People with a B or C permit can also use their pension assets from pillar 3a and the pension fund to purchase property. This can be done either by early withdrawal or pledging.
Taxes: Effects for homeowners with B and C permits
Anyone who owns residential property in Switzerland is subject to the same tax regulations as Swiss citizens. This applies regardless of residence status. Various taxes and duties apply to the purchase, ownership and sale of property.
With a B permit, you are still subject to withholding tax, regardless of the amount of your income or the purchase of residential property. However, the acquisition of real estate creates the obligation to submit a tax return. If you do not own real estate, this obligation only applies to holders of a B permit if their annual gross income exceeds CHF 120,000.
After acquisition: imputed rental value, property tax and deductions
By the end of 2028, owners of owner-occupied properties will have to fulfil the so-called Imputed rental value taxable as notional income.
Deduction options until the abolition of the imputed rental value:
- Mortgage interest
- Value-preserving maintenance costs effective or flat-rate
- Energy-related renovations: deductible, even spread over several tax periods
With the abolition of the imputed rental value, the deductibility of debt interest and maintenance costs will also largely cease.
Property tax
The property is a taxable asset and the tax value must be declared annually.
On sale: property gains tax
Anyone who sells a property at a profit owes the canton a so-called property gains tax. The amount depends on the profit realised and the holding period: the shorter the holding period, the higher the tax rate. Long-term owners benefit from significantly lower rates. The tax can be deferred if residential property is purchased again in Switzerland within two years.
Moving out of Switzerland: What happens to the property?
A question that many expats ask themselves: What happens to my Swiss property when I leave Switzerland? The answer depends on the residence status at the time of purchase and on future changes to the Lex Koller.
Applicable law: No obligation to sell
Under the current law, there is generally no obligation to sell the property when moving out of Switzerland. If you keep your property when you move away, you will be subject to limited tax liability in Switzerland from the date of departure, exclusively for the property and the associated income (e.g. rental income).
The unlimited tax liability ends with the departure; however, Switzerland remains responsible for the income from the property. The double taxation agreement with the respective country of residence regulates the coordination. As a rule, the property is taxed where it is located according to the so-called location principle.
Planned tightening of the Lex Koller: obligation to sell looms
On 15 April 2026, the Federal Council approved a Consultation on the tightening of the Lex Koller opened. One key point: in future, third-country nationals will have to sell their main residence property within two years when leaving Switzerland. This regulation is not yet in force, it is currently in the consultation process and is politically controversial. However, anyone buying today should factor this possible change of course into their long-term planning.
According to the present preliminary draft, no new sales obligation is envisaged for EU/EFTA nationals with a B permit and for all persons with a C permit.
Tax consequences of moving away
Property gains tax:
- Only due on actual sale, not on departure
- Switzerland retains the right of taxation irrespective of the future domicile of the seller
- The longer the holding period, the lower the tax rate
Rental income after departure:
- Rental income from a Swiss property remains taxable in Switzerland (limited tax liability)
- A tax return must still be submitted in Switzerland
- Double taxation agreement in the country of departure must be taken into account
Conclusion
It is generally possible to purchase residential property in Switzerland with a B or C permit, but there are differences between the permit types and nationalities. If you come from the EU or EFTA, you are equivalent to a Swiss citizen with a B permit. If you come from a third country, you must be familiar with the limits of the Lex Koller and keep an eye on any changes.
Mortgage lending follows clear rules, but in practice is also subject to bank-specific discretionary considerations. From a tax perspective, the same applies as for Swiss owners, with a few additional aspects when moving away that need to be factored into planning at an early stage.
The possible tightening of the Lex Koller and the abolition of the imputed rental value will noticeably change the framework conditions for owners in the coming years. Anyone buying today should be aware of these developments and adjust their tax and financial planning accordingly.
Do you have questions about your personal situation or would you like to know which strategy is best for you? We are happy to support you proactively, independently and holistically throughout the entire process.