Available in two languages: English and French SIGN NEWSLETTERS UP FOR OUR N°10 [email protected] NEWSLETTER Editorial he "Law on regional development (LAT) T of 01.05.2014", ... the "Law on second homes (LRS) of 01.01.2016"... The legislator’s The acquisition of holiday homes in Switzerland ingenuity knows no bounds and the situation has moved on a lot since our first newsletter by foreigners from outside the EU and EFTA, on the subject (No. 5), which focused on the without a permanent residence permit (C permit) conditions under which a person regarded as foreign (generally and put in simple terms, usually a national from a country outside the European Union) may acquire a second home 1 in Switzerland, in accordance with the Introduction Swiss law has recently evolved further in this Federal Law on the acquisition of real estate domain, since the Law on Second Homes by persons domiciled abroad (LFAIE). The advantage of having one of the best came into force on 1 January 2016; it bars Although the two laws mentioned above qualities of life in the world has made new second homes from being built in pursue different goals from those of the LFAIE Switzerland an attractive country in which municipalities where they already constitute of 1983, they are superimposed on it. to acquire property. Given the environment, more than 20% of residences. In addition, It is true that, during this period, Switzerland its economic stability, security and tax ad- the cantons are currently in the phase of im- experienced substantial growth in the vantages, Switzerland is a very advantageous plementing the requirements of the revised economy and in real estate within a limited place in which to live and go on holiday. Law on Regional Development (LAT), which territory, so much so that popular opinion came into force on 1 May 2014, requiring called for restrictions in order to avoid However, since the beginning of the future urban development to be concen- "sprawling" development. 1960s, the Swiss authorities have pro- trated primarily in the existing construction This also means that it is not "foreigners" who gressively put measures in place to zones, in order to curb urban sprawl. are the target of this new legislation, but rather restrict access to property by foreigners in the pressures of uncontrolled urbanisation that Switzerland, particularly to preserve cer- 2 Acquisition of a holiday home Switzerland would like to channel and regulate tain highly tourism-based regions from better. As a result, certain municipalities, which foreign control. Federal regulation of the are already considered to have an ample supply acquisition of real estate by persons of second homes, find themselves, for example, barred from acquiring new ones (subject to The Federal Law of 16 December 1983 abroad (LFAIE) certain exceptions outlined below, which are on the acquisition of real estate by per- To determine whether or not you are quite restrictive). Coming back to the LFAIE, sons abroad (the LFAIE - also known subject to the LFAIE and the OAIE, you the quota of permits for the purchase of as "Lex Friedrich" or "Lex Koller") and should take into consideration (1) your second homes by foreigners is limited to 1500 its implementing ordinance (Ordinance country of origin and (2), if relevant, your for the whole of Switzerland, to be divided on the acquisition of real estate by category of Swiss residence permit. As a among only the cantons identified as being "tourism-oriented" (which does not include, persons abroad – OAIE) regulate access general rule, the LFAIE is applied according for example, the two urban cantons of Geneva to property in Switzerland by foreigners. to the following principles: or Zurich – as opposed to the canton of Vaud). In summary: it is not impossible for a foreigner With Without a Swiss With an L 1 With a B 2 With a C 3 to buy a holiday property in Switzerland, but Origin residence permit residence permit residence permit residence permit there are considerable restrictions and each EU or EFTA individual case requires specialist advice in nationals, Subject to Same treatment Same treatment Same treatment except those the LFAIE/OAIE as a Swiss citizen as a Swiss citizen as a Swiss citizen order to stand the best chance of a successful from Croatia 4 outcome. Nationals from Thierry Barbier-Mueller third countries 5 Subject to Subject to Subject to Same treatment Chief Executive Officer and Croatia the LFAIE/OAIE the LFAIE/OAIE the LFAIE/OAIE as a Swiss citizen If you are a person affected by the restric- - In the event that you want to acquire unity between these homes and the esta- tions of the LFAIE/OAIE (we designate a building plot, construction must start blishment. such persons hereinafter as "foreigners"), within a reasonable time frame (which in A structured accommodation establishment in order to acquire a holiday home, this practice is within a maximum of one to that existed prior to 11 March 2012 may be possibility must be provided for in the law two years). reassigned as homes without restriction of the canton where the property in ques- - The holiday home may be rented out for on their use, for up to 50% of its usable tion is situated. Currently, this is the case short periods, but year-long rental is not surface area, on certain conditions (in op- in the following cantons: Appenzell Aus- allowed. eration for at least 25 years, and no further serrhoden (AR), Bern (BE), Fribourg (FR), - It is not possible to acquire a holiday home potential for profitable operation). Glaris (GL), Graubünden (GR), Jura (JU), if you, your spouse or your child aged un- Lucerne (LU), Neuchâtel (NE), Nidwald der 18 years, are already the owner of a New properties in protected buildings (NW), Obwald (OW), St. Gallen (SG), second home or a holiday home in Swit- New second homes can be built in pro- Schwyz (SZ), Schaffhausen (SH), Ticino zerland, unless you sell your first property. tected buildings in the construction zone (TI), Uri (UR), Vaud (VD) and Valais (VS). if the external appearance and the original It is therefore not possible, for example, to Federal regulation relating to se- architectural structure remain unchanged, if acquire a holiday property in Geneva or cond homes (LRS) the long-term preservation of the building Zurich. In 2015, the cantons where the ma- The LRS, which came into force on 1 January cannot be achieved in any other way and if jority of foreign-owned holiday accommo- 2016, introduces the rule whereby no new there is no conflicting predominant interest. dation was located were Valais, Ticino, Vaud, second home can be permitted in muni- Graubünden and Bern. cipalities where the proportion of second Properties built under the previous law homes already exceeds 20% of housing If the property already existed (or if a con- In addition, you should check whether the stock (for example, Montreux, Château- struction permit had been granted) before holiday home that you plan to purchase is d’Œx, Saanen, Saint-Moritz, etc). In other 11 March 2012, it can be used freely as a main actually located in one of the municipali- words, in principle, it is no longer possible or second residence, no matter what its pre- ties designated as a "holiday resort"; those to build a holiday home (which by definition vious use was. Such a property may also be municipalities are designated in the inter- is a second home) in these municipalities, renovated, converted and rebuilt. Where ad- nal legislation of each of the cantons cited with certain exceptions (see below). ditional properties result from this, they may above. be used without any restriction on their use. It should be stressed that, unlike the LFAIE, Before purchasing a holiday home, you must which is designed to limit the ability of for- A property built under the previous law in a apply for a permit. This will only be granted eigners to acquire property, the LRS places construction zone may be enlarged, but up within the quota of permits, currently set by Swiss nationals and foreigners under the to a maximum of 30% of the main usable the Federal Council at 1500 units per year same constraints. area that existed before 11 March 2012, for the whole of Switzerland; this is in or- provided that it does not result in any addi- der to guard against uncontrolled increase It is also important to state that the cantons tional home. of second homes and holiday properties and municipalities may impose even stricter in tourist areas and to counter the prolif- conditions than those set out in the LFAIE The LRS provides for the option of suspend- eration of "unoccupied beds". The Federal and the LRS, as we will see later on. ing, for a period of two years (extendable), Council allocates the quota units among the the requirement to designate a property as cantons according to their importance for The exceptions to the ban on new second the main residence if the owner can prove tourism and the proportion of land on their homes include the following: that the property has been offered for sale territory which is owned by foreigners: for on the market at a reasonable price, but has example, in 2016 there were 175 units in Properties linked to structured accommo- not been sold. In this context, it should be the canton of Vaud, 330 in Valais and 195 in dation establishments noted that the Federal Supreme Court (TF) Ticino. Structured accommodation establishments 6 has recently blocked two real estate pro- may build new second homes (which may jects concerning a total of 44 apartments in It should be noted that you will not need to be put up for sale), subject to the following Ovronnaz (VS).