Buying Property as a Foreigner: How Does It Work in Switzerland?
As a Hungarian citizen, you can buy property in Switzerland — but you will face significant legal restrictions, cantonal differences, and strict financing conditions. A detailed guide to Lex Koller, the authorisation process, and the practical steps involved.
Who may buy property in Switzerland, and who may not?
Swiss law distinguishes three basic categories from the perspective of property buyers.
1. Swiss citizens and permanent residents of Switzerland (C permit / Niederlassungsbewilligung C): They face no special restrictions. A Hungarian citizen with a C permit may buy on the same terms as a Swiss national.
2. EU/EFTA citizens with a Swiss residence permit (B permit / Ausländerausweis B): They may buy property for their personal main residence (Hauptwohnsitz / résidence principale), provided they actually live and work in Switzerland. However, buying a holiday home, an investment property or an apartment in a resort area falls under Lex Koller and is subject to authorisation — and in many cases is outright prohibited.
3. Foreigners not resident in Switzerland (non-residents): This is the most strictly restricted category. For them, buying holiday property is subject to cantonal quotas, and buying residential property is generally not possible.
Where does a Hungarian living in Switzerland fit into this system?
If you have a valid B permit and live in Switzerland, you may buy an apartment or house for your main residence — without a permit. However, if you want to buy a holiday home in Valais or an apartment in Engelberg as an investment, the rules of Lex Koller apply.
What is Lex Koller, and why does it matter?
Lex Koller (LFAIE) is a federal law introduced in 1983 and amended several times since, designed to prevent Switzerland’s property market from being “alienated” by foreign capital (Überfremdung des einheimischen Bodens). The law’s main provisions are:
Residential property: As a rule, a non-resident foreigner may not buy residential property. Exception: if the property serves as the buyer’s Swiss main residence and they hold a valid residence permit.
Holiday property (résidences secondaires / Ferienwohnungen): Only with a permit, and only in cantons where the federal quota allows it. The federal government allocates a total of around 1,500 permits per year among the eligible cantons — an extremely tight bottleneck.
Commercial property: As a rule, this does not fall under Lex Koller, but the details are complex and depend on the individual case.
Agricultural land: This is governed by a separate law (LDFR / Bundesgesetz über das bäuerliche Bodenrecht) and is practically inaccessible to foreign buyers.
Violating Lex Koller has serious consequences: the contract is void, the buyer may lose the money invested, and criminal proceedings may also be initiated.
What cantonal differences are there?
In Switzerland, property market regulation also differs significantly at cantonal level. It is worth understanding this from three perspectives:
Where can holiday property be bought with a permit?
Holiday property permits (contingents cantonaux) are available only in certain tourist cantons: primarily Valais (Wallis), Graubünden (Grischun), Bern (the Berner Oberland region), Vaud (Waadtland) and Ticino (Tessin). In cantons such as Zürich, Genève, Basel or Zug, a foreigner cannot buy holiday property under Lex Koller.
The impact of the Weber Initiative (2012)
The Weber Initiative (Zweitwohnungsinitiative), adopted in 2012, tightened the situation further: in municipalities where the share of secondary homes exceeds 20%, no new permit may be issued for holiday-home construction. This affects many traditional tourist destinations (e.g. Zermatt, Verbier, Saas-Fee) and further reduces supply.
Property tax and transfer duty by canton
Taxes and duties linked to property purchases vary from canton to canton. The property transfer tax (Handänderungssteuer / droits de mutation) is generally between 1% and 3.3% of the purchase price, but in some cantons (e.g. Zürich) this tax does not exist, while in others (e.g. Valais) it is around 3%.
⚠️ The editor should verify the exact cantonal rates on the current cantonal tax authority websites before publication.
How does the property purchase process work step by step?
Step 1: Clarify eligibility
Before viewing any property, clarify your legal status:
Do you have a valid Swiss residence permit (B or C)?
Would the property be a primary residence or a holiday home?
In which canton and in which zone is the property located?
These questions determine whether a permit is required and whether the purchase is possible at all.
Step 2: Property search
In Switzerland, the property market is transparent and digitalised. The main portals are Homegate, ImmoScout24, and Comparis. Involving a real estate agent (Immobilienmakler / agent immobilier) is not mandatory, but strongly recommended — especially for a foreign buyer who is not familiar with local practices and cantonal specifics.
Step 3: Arrange financing in advance
Swiss banks also provide mortgage loans (Hypothek / hypothèque) to foreign buyers, but on stricter terms. This is covered in detail in the next section.
Step 4: Offer and preliminary contract
In the Swiss property purchase process, once the offer (Kaufangebot / offre d'achat) has been accepted, a preliminary contract (Vorvertrag / avant-contrat) may be concluded, which must be signed before a notary. This is already legally binding.
Step 5: Notarial purchase agreement
In Switzerland, the transfer of property is only possible through a purchase agreement (Kaufvertrag / acte de vente) signed and certified before a notary (Notar / notaire). The notary’s role in Switzerland differs from that in Hungary: they also handle the transfer with the state register (Grundbuch / registre foncier).
Step 6: Land register entry
Ownership becomes complete only with the land register entry (Grundbucheintrag / inscription au registre foncier). This usually takes place a few weeks after signing.
Total time required for the full process: from the start of the search to the land register entry, typically 3–6 months, but for purchases requiring a permit it can take 6–12 months.
How can the property be financed: a mortgage as a foreigner
Conditions for a Swiss mortgage
Swiss banks do provide mortgages, but the conditions are strict:
Condition | Details |
|---|---|
Own funds (Eigenkapital) | At least 20% of the purchase price, of which at least 10% may not come from pension assets (2nd pillar) |
Proof of income | From a Swiss employer, supported by a Swiss tax return |
Debt service limit | The total cost of the loan (repayment + interest + maintenance) may not exceed 33% of gross income |
Residence permit | A B or C permit is generally required |
Credit assessment | Based on the Swiss credit register (ZEK / IKO) |
Hungarian bank loan for Swiss property
In practice, taking out a mortgage from a Hungarian bank for Swiss property is extremely difficult, and in most cases not a realistic solution. A Swiss property cannot be accepted as collateral by a Hungarian bank, the currency risk (CHF/HUF) would be unmanageably high, and the Swiss notarial procedure cannot be integrated into the Hungarian loan process. This solution is not recommended.
Using the 2nd pillar (berufliche Vorsorge / BVG)
A Hungarian employee working in Switzerland may use their mandatory occupational pension capital (2nd pillar) to purchase their own primary residence – but only for a primary residence, and only for Swiss property. This option may come with an obligation to repay it upon returning home.
Taxes and contributions: what must be paid at purchase and afterward?
One-time purchase costs
Real estate transfer tax (Handänderungssteuer): ranges from 0–3.3% by canton (in some cantons, e.g. Zürich, it does not exist)
Notary fee: typically 0.1–0.5% of the purchase price, depending on the canton
Land registry entry fee: typically 0.1–0.3% of the purchase price
Real estate agent commission: usually 2–3% + VAT (in Switzerland, the agent’s fee is typically paid by the seller, but this is a matter of agreement)
Ongoing tax burdens
Property tax (Liegenschaftssteuer / impôt foncier): does not exist in every canton; where it does, it is usually 0.1–0.3% of the property’s tax value per year
Imputed rental value tax (Eigenmietwert / valeur locative): in Switzerland, owners living in their own home are taxed on a notional rental income as part of the tax base – a distinctive feature of the Swiss tax system that most foreigners are not familiar with. The amount varies by canton, typically 60–70% of the market rental value.
⚠️ The Eigenmietwert system is politically controversial, and reform proposals are underway in 2025–2026. The editor should verify the current legal situation before publication.
Practical advice: which experts are worth involving?
Buying property in Switzerland – especially as a foreigner – is not something to handle alone. Involving the following experts is strongly recommended:
Swiss real estate lawyer (Immobilienanwalt / avocat immobilier): Essential for reviewing the contract and clarifying Lex Koller issues. It is particularly important if the property cannot be clearly classified (e.g. mixed-use building, inheritance-related rights).
Local real estate agent (Immobilienmakler): The Swiss property market is highly local. An agent working in Zürich will not necessarily know the specifics of the Valais holiday property market.
Tax advisor (Steuerberater / conseiller fiscal): This may be necessary for the Eigenmietwert, optimizing the purchase duty, and the Hungarian–Swiss double taxation agreement (1981, as amended).
Hungarian-speaking professional: In Switzerland – especially in Zürich, Bern, and Genève – Hungarian-speaking real estate and tax law professionals, or professionals serving Hungarian clients, are available. You can find their list in the svajc.com community database after registration.
Common mistakes and misunderstandings among Hungarian buyers
1. “With a B permit, I can buy anything” Not true. A B permit allows the purchase of property for a primary residence – but holiday property, investment property, or property purchased in non-resident status is subject to authorization or prohibited.
2. “Lex Koller applies only to non-EU citizens” Partly true, but misleading. As an EU citizen, you may indeed buy a primary residence freely – but Lex Koller also applies to EU citizens when buying holiday property.
3. “I’ll finance it from a Hungarian bank” See above: in practice, this solution does not work.
4. “The agent will take care of everything” The real estate agent is not a lawyer and not a tax advisor. Legal and tax matters require a separate specialist.
5. “If the property is cheaper, the permit is easier to obtain" The price does not affect the permit requirement. A holiday home worth CHF 200 000 is subject to the same permit rules as one worth CHF 2 000 000.
6. “I can withdraw my 2nd pillar anytime when I return home" If you used your 2nd pillar for a property purchase, the capital must be repaid to the pension fund when you return home — or settled through the sale of the property. This is a critical point for return plans.
Sources
Federal Department of Justice and Police (EJPD/FDJP) – LFAIE/Lex Koller: https://www.bj.admin.ch
Federal Statistical Office (BFS/OFS) – real estate market data: https://www.bfs.admin.ch
ch.ch – official Swiss government portal: https://www.ch.ch
Federal Tax Administration (ESTV/AFC) – property taxation: https://www.estv.admin.ch
Zweitwohnungsgesetz (ZWG) – implementing act for the Weber initiative: https://www.are.admin.ch
In Brief
In Switzerland, the right to buy property as a foreigner depends primarily on your residence status and the type of property. With a B or C permit, you can generally buy a property for use as your main residence, but a holiday home, an investment property, or property purchased as a non-resident may fall under Lex Koller and is often prohibited.
Key Takeaways
- You need to check your residence status: with a B or C permit, you can generally buy a property in Switzerland for use as your main residence.
- For a holiday property or an apartment bought for investment purposes, the rules of Lex Koller apply, and in many cases no permit can be granted.
- Before buying, you must clarify which canton and zoning category the property is in, because the rules differ from canton to canton.
- Without a notarised purchase agreement and entry in the land register, ownership is not complete.
- A Swiss mortgage typically requires at least 20% equity, and the debt burden must not exceed 33% of gross income.
- Pillar 2 funds can be used to buy a main residence in Switzerland, but repayment obligations may arise if you return home.
Frequently Asked Questions
Who can buy property in Switzerland as a foreigner?
Swiss citizens and permanent residents with a C permit can buy without special restrictions. EU/EFTA citizens living and working in Switzerland with a B permit can buy property for use as their main residence. For non-residents, the options are heavily restricted.
Can a Hungarian with a B permit buy an apartment in Switzerland?
Yes, if the property is intended for the buyer’s personal main residence and the buyer actually lives and works in Switzerland. For a holiday home, an investment property, or an apartment in a resort area, the rules of Lex Koller apply. In these cases, the transaction is often subject to authorisation or prohibited.
What is Lex Koller?
Lex Koller is a Swiss federal law that restricts property purchases by foreigners. Its purpose is to prevent the Swiss property market from being bought up by foreign capital. As a general rule, non-resident foreigners may not buy residential property.
Where can foreigners buy a holiday property in Switzerland?
This is only possible in certain tourist cantons, and even there only with a permit and within quota limits. According to the article, these cantons are mainly Valais, Graubünden, Bern, Vaud, and Ticino. This option is not available in Zürich, Genève, Basel, or Zug.
How long does a property purchase take in Switzerland?
From the search phase to registration in the land register, the process usually takes 3–6 months. If the transaction requires authorisation, it can take 6–12 months. The exact duration depends on the status, the canton, and the authorisation procedure.
Under what conditions do Swiss banks grant mortgages to foreigners?
According to the article, at least 20% equity is usually required, of which at least 10% must not come from pension assets. In addition, proof of income from a Swiss employer, a Swiss tax return, and debt servicing of no more than 33% of gross income are required.
What mistakes do Hungarian buyers most often make?
A common misconception is that a B permit allows the purchase of any property, when in fact this only applies to a main residence. It is also incorrect to assume that financing from a Hungarian bank is a realistic solution, or that the agent will handle every legal and tax issue. The purchase price alone does not remove the permit requirement.
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