Key Elements of the LFAIE Law

Before embarking on the purchase of a property in Switzerland, a detailed understanding of the LFAIE (Federal Law on the Acquisition of Real Estate by Persons Abroad) is essential. This law, implemented to regulate the purchase of real estate by foreigners, aims to preserve the stability of the real estate market and protect national interests. It comprises several essential aspects that are important to master before making an investment.

Here are the key elements of the LFAIE law to guide you in your investment:

Preliminary Authorizations

As its name suggests, this federal law applies throughout the country. Before starting your transaction, it is imperative to consult an expert like Luxury Places to understand the specific requirements of the region where you wish to purchase.

Types of Properties Concerned 

The LFAIE primarily targets residential properties and buildable land.

Regional Restrictions – Lex Weber Law 

There is a second law, called the Federal Law on Secondary Residences (LRS) or "Lex Weber," which limits secondary residences to 20% per municipality, regardless of the nationality and primary residence of the buyer. Additionally, several cantons have implemented quotas on the number of properties that can be purchased by foreigners, in order to balance real estate development and protect the environment.

Swiss Nationality, Residence Permit, and Non-Residents

• Swiss Nationality

Swiss citizens have no restrictions on purchasing a primary or secondary residence, except for the Lex Weber law.

• For Foreigners Residing in Switzerland:

Permit C (Permanent Residence)

Permit C holders have permanent resident status and enjoy rights similar to those of Swiss citizens:

• Primary Residences: Possibility to purchase real estate without any restrictions
• Secondary Residences: Restrictions imposed by certain regions under the Lex Weber law. The acquisition of secondary residences is limited to 20% per municipality, regardless of the nationality and primary residence of the buyer.

Permit B (Temporary Residence)

Permit B holders are temporary residents, with permits generally renewed every 1 year (non-EU/EFTA nationals) and every 5 years (EU/EFTA passports).

They have the following possibilities:

• Primary Residence  
  • For EU and EFTA passports: No restriction
  • For other passports: They can purchase a primary residence only on land up to 3,000m² (no restriction on living area)

• Secondary Residences and Investments:
  • For EU and EFTA passports: No restriction, but the Lex Weber law applies (see Lex Weber law)
  • For other passports: No possibility to purchase a secondary residence, except in exceptional cases and under specific conditions

For Foreigners Non-Residents in Switzerland:

Foreign non-residents in Switzerland face the strictest restrictions:

• Primary Residences: No possibility to purchase primary residences
• Secondary Residences: Purchase of secondary residences is only limited to certain municipalities*. These areas, such as Montreux on the Lake Geneva arc or most ski resorts, have an annual transaction quota specific to each region. The law remains federal and allows only the acquisition of one property per person with a maximum living area of 200m² and land less than 1,000m².

Explore our explanatory diagram of the LFAIE as well.

Learn more :

• Conditions for obtaining a Permit B for the purchase of a primary property in Switzerland

• How can Luxury Places help you acquire real estate as a foreigner?