Swiss government seeks tighter limits on foreign property purchases

The Swiss government said Wednesday that it wants to tighten restrictions on property purchases by foreigners as the country faces a housing shortage.

Under proposals sent for consultation until July 15, nationals from countries outside the EU and EFTA would need authorization to buy a primary residence in Switzerland, the Federal Council said in a statement.

The council said such owners would also have to sell the property within two years if they move away from Switzerland.

The government is also seeking stricter rules for foreign purchases of commercial real estate, allowing exemptions only if the buyer operates the business directly.

It further wants to limit purchases of vacation homes and apartment hotels by reducing annual quotas for cantons and requiring authorization for sales between foreign buyers, according to the statement.

The measures would also end the general permission for foreigners to buy shares in listed residential real estate companies and certain real estate funds.

The government said the changes are aimed at refocusing the Lex Koller law, the federal law on home ownership by foreigners, on its original purpose and are also part of a broader package adopted by the government alongside its rejection of the "No to ten million Switzerland" popular initiative, which seeks to cap immigration and will go to a nationwide vote on June 14.

Lex Koller, introduced in 1983, limits the amount of property in Switzerland that foreigners can buy. It was designed to prevent too much foreign ownership, reduce speculation, and help keep housing affordable for Swiss residents. Some exceptions apply, including for commercial properties, primary residences for B and C permit holders, and certain EU and EFTA citizens.