Buy real estate in Switzerland from abroad:
"LAFE” approval

The purchase of vacation homes by foreign citizens is limited by the "Lex Koller" federal law (previously called "Lex Friedrich"). We strongly recommend that you identify from the very beginning which properties will be eligible for your purchase.

The "LAFE" law of December of December 16, 1983 about the acquisition of real estate by persons from abroad ("LAFE") limits the purchase of property by foreigners. "LAFE" is a cantonal law in the application of the federal law about the acquisition of real estate by persons from abroad.
When a piece of property is bought, it must be made the subject of LAFE approval. In practice, authorization must be sought from cantonal authority. The procedure is complex, and the involvement of a local lawyer is recommended to manage it. The approval process may require up to a few months before being completed. Only the following people are not subject to the "LAFE":

• Swiss citizens, including those with other nationalities
• Citizens of the member states of the European Union or of the European Free Trade Organization that have legal and effective residence in Switzerland
• Citizens of other countries with a "C" residence permit for Switzerland. This permit is the last step before obtaining citizenship for all intents and purposes. In practice it is released on a case-by-case basis after 5-10 years of residence in Switzerland.

 

"LAFE" authorization for the purchase of a vacation home found in a tourist area, as defined by the Canton, requires that it have an area of no more than 200 m² (including kitchen, entrance hall, bathrooms, indoor pool, and sauna but excluding basement, balconies and stairways) and that the property not exceed an area than 1000 m²; in these cases, it is generally granted. Real estate (such as rooms, villas, apartments in cities, family houses, etc) in "non-tourist" areas are subject to a very rigorous approval process, and in practice, approval is rarely granted to non-residents.

Additionally, a maximum of a third of gross square footage of the building may be sold to foreigners and the cadastral value of the property must amount to at least 300,000 CHF. This figure corresponds typically to a purchase price of 700,000 CHF.
Also, one must be aware that there is a quota system that is applied to the number of vacation houses sold to foreigners each year. Once the specified quota is reached, it becomes necessary to seek approval the following year.
As part of the "LAFE" process, a non-resident foreigner must show evidence of "close links" with the place of the intended purchase. For example, the fact that one has spent one's summer vacations since childhood is recognized by the County as a valid motive for granting approval. Once the County has granted approval, federal permission is generally a formality.
It is recommended that the "LAFE" approval be taken very seriously. The details can be found in the following article:
Acquisition of real estate by foreign persons

 

We note finally that owning a property in Switzerland does not automatically mean that it may become a permanent residence.
Latest news (June 2010): There remain at least 6 months before the final repeal of the Lex Koller law, because it is dependent on the land planning law. Articles about the repeal have circulated on the web for 5 years. Without the "LAFE" it will be possible for foreigners to obtain a permit to purchase real estate, vacation homes and houses without a complicated authorization procedure. However, the counties and communities will adopt measures to limit a strong increase in the demand for vacation homes. There may be quotas or specific regulations to limit the increase of vacation homes (for example the proportion of second homes may not exceed a certain percentage).

 

(Source: The 7 steps to purchasing real estate in Ticino)

 

Next page: Taxation in Switzerland: Practical information

Useful information:

Lugano: history and development
Ticino: description of the region
The Swiss context: geography and languages

Buying property from abroad in Switzerland
Taxation in Switzerland: Practical information

 

 

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