Acquisition of real estate in Switzerland

04.11.2013

Explanation by Me Luca Bozzo from Borel & Barbey.

Many foreigners purchase real estate in Switzerland. These transactions may be subject to the LFAIE law.

Restrictions may apply depending on the nationality and residence of the buyer and the targeted property.

Before undertaking the steps to acquire real estate, a foreigner wishing to purchase property in Switzerland must ensure that the property and themselves, as the buyer, do not fall under the scope of the LFAIE. If the intended real estate transaction is subject to the authorization regime, it will require authorization from the competent cantonal authority.

For the intended transaction to be subject to authorization, the buyer must be a "person from abroad" within the meaning of the LFAIE, and the real estate must fall within the categories subject to authorization. These two conditions are cumulative; otherwise, the transaction will not require authorization.

By "person from abroad," the LFAIE refers to (i) foreigners residing abroad or (ii) foreigners residing in Switzerland who are neither nationals of a member country of the European Community (EC) or the European Free Trade Association (EFTA), nor hold a C settlement permit. "Person from abroad" also refers to (iii) companies headquartered abroad or (iv) companies headquartered in Switzerland but controlled by persons abroad.

Only certain categories of properties are subject to the LFAIE. In principle, all residential properties are subject to it. Properties intended for economic activity are excluded from the scope of the law.

Thus, a foreigner (EC/EFTA national or person with a C settlement permit) residing in Switzerland may freely acquire a residential property as their main residence. The acquisition must be made directly in the buyer's name.

A real estate transaction carried out in violation of federal law can have legal, civil (up to nullification of the deed), administrative, and criminal consequences. Before undertaking potentially authorization-required transactions, it is strongly recommended to consult with a specialist.