Lex Koller: when regulation meets reality

What the bill is about

The planned changes affect several areas at the same time. In future, third-country nationals will require a permit to purchase a main residence. If they leave Switzerland, they will be obliged to sell their property within two years. Business properties will only be available to persons abroad for their own business operations; pure capital investments will be excluded. Lower quotas are planned for vacation homes, and the acquisition of shares in residential Real Estate companies and corresponding real estate funds is to be prohibited in principle for persons abroad.

The goal is clear: less foreign capital in the Swiss real estate market. The real question is whether the proposed measures will achieve this goal and what side effects they will have.

A measure with limited reach

The independent regulatory impact assessment carried out by Stefan Fahrländer and his team at Fahrländer Partner Raumentwicklung on behalf of the Federal Office of Justice comes to a clear conclusion: the tightening would only affect around 2.5 percent of all residential property transactions. The planned halving of the cantonal vacation apartment quotas would also largely come to nothing, as these quotas have not been nearly exhausted in recent years.

The study concludes that the proposals are not suitable for significantly alleviating the structural challenges of the Swiss real estate market. On the contrary, there is a risk that the proposal will create new problems without solving existing ones.

Obligation to sell without viable execution

The Fahrländer study takes a particularly critical look at the planned obligation to sell when moving away. The central finding: there is currently no interface between the residents’ registration office and the land register. An authority that registers a move abroad does not automatically transmit this information to the land registry. This leaves open the question of how an obligation to sell is to be enforced in practice.

Added to this is the federal structure of enforcement: the Lex Koller is implemented at cantonal level, with different licensing authorities, procedures and responsibilities. A nationwide, uniform control of the obligation to sell would require new administrative structures, data flows and interfaces that simply do not exist today. The proposal formulates an obligation that, from today’s perspective, cannot be enforced either organizationally or technically.

Listed real estate companies face an execution dilemma

A second serious enforcement problem concerns listed residential real estate companies and real estate funds. The bill stipulates that persons abroad may only acquire shares in such vehicles with a permit. The operational consequence: every transaction would have to be checked to see whether a person abroad is on the buyer’s side.

In stock exchange trading, which takes place in a matter of seconds, such a check cannot be carried out in practice. The beneficial owners behind securities account structures, collective securities accounts and institutional investors cannot be reliably identified in real time. For the companies concerned, this means regulation that they can hardly fulfill on their own. The consequence would be a widespread suspension of regular trading for foreign investors, with corresponding effects on liquidity, price formation and capital procurement.

Several market observers point out that a buyer check requiring approval could effectively prevent foreign investors from trading Swiss real estate securities on the stock exchange. The result would be a noticeable change in the ownership structure and potential pressure on the valuations of entire market segments.

Effects on the investment climate and Switzerland as a business location

Interventions in the capital market do not have a selective effect, but have an impact on the general investment climate. Switzerland is regarded internationally as a reliable real estate market with clear framework conditions and a high degree of legal certainty. Frequent regulatory intervention can change this perception. International investors react to new restrictions with caution, which makes it more difficult to finance large development projects and can further slow down construction activity.

The proposal therefore has an indirect effect on the lever that is actually decisive for market development: supply. Anyone who adds additional friction to the capital market risks fewer projects being realized. The consequences for the availability and affordability of housing are of a long-term nature.

More effective levers lie elsewhere

From a technical perspective, other measures have a much greater impact on the central market issues. These include the acceleration of planning and approval procedures, the activation of building land reserves and the targeted promotion of densification in existing settlement areas. These measures focus on supply and therefore on the point at which structural changes can actually be achieved.

What the bill means for owners and investors

The demand for high-quality residential space remains structurally high and good locations are maintaining their attractiveness. Short-term price changes due to the planned regulation are unlikely, as the proposal only affects a small proportion of transactions and its practical feasibility is unclear in key points.

For investors in listed real estate securities, however, the implementation issues are of direct relevance. If the planned authorization requirements are implemented as planned, increased volatility, possible adjustments to ownership structures and a changed liquidity situation are to be expected. Careful observation of the consultation process and parliamentary deliberations is therefore advisable.

Conclusion

The planned tightening of the Lex Koller addresses a narrow range of transactions without addressing the structural challenges of the Swiss real estate market. In two central points, the organizational and technical basis for a functioning enforcement is missing: the obligation to sell without an interface between the residents’ registration office and the land register and the shareholder verification in seconds trading on the stock exchange. For owners and investors, the following therefore continues to apply: it is not individual regulatory interventions that are decisive, but the fundamentals of the market and the reliability of the framework conditions.

Sources and further information

Federal Council press release of April 15, 2026 on the Federal Act on the Acquisition of Real Estate by Persons Abroad, the so-called Lex Koller. Regulatory impact assessment by Stefan Fahrländer, Mattia Farei-Campagna and Daniel Cavelti, Fahrländer Partner Raumentwicklung, on behalf of the Federal Office of Justice, consultation 2025/58.