A guide to buying a second home in Switzerland

Owning a property in Switzerland provides a front row seat to the country’s stand-out natural beauty of high Alpine peaks, calm lakes and dramatic rivers. For clients planning to buy property here, there are other equally compelling if less scenic reasons. The landlocked country at the heart of Europe offers political and economic stability, top-grade education options, a supreme lifestyle in a country with an excellent infrastructure and proven steady investment potential. Making a Swiss francs investment has an obvious appeal for international buyers.

Yet for these international buyers, purchasing a home in Switzerland is not always straightforward, with properties in most of the country reserved for Swiss-based residents.

The Lex Koller explained

Alex Koch de Gooreynd, Partner in Knight Frank’s International Residential team, explains.

"The Lex Koller is the law governing the acquisition of real estate in Switzerland,” he says. “It dictates that only Swiss passport holders or those with a B or C residency permit may purchase residential property. The only exception to this rule is that non-residents, or foreign nationals, may purchase in designated holiday zones. These are predominantly found in certain ski resorts as well as the immediate areas surrounding Montreux or Lugano.

"Within these areas, a non-Swiss resident may purchase one property per named individual with a maximum size of 200 square metres of official living space and around 1,000 square metres of land.”

The Lex Koller rules mean that non-Swiss residents can buy in Verbier, a designated holiday zone, but not in Le Châble, the nearby village just 14 minutes away by car. And it's important to note that while the federal Lex Koller determines the acquisition of real estate, each of Switzerland’s 26 cantons (regions) can set their own regulations on many aspects, transfer tax levels and notary costs for example.

The size restriction for non-Swiss buyers, a maximum of 200 square metres of living space, excludes balconies, basement areas and height-limited eaves space under sloping roofs. Typically, this size would allow for a generous three bedroom apartment and is ample for many second home buyers.

“For those buyers who want more space in a holiday home, the only option is through properties that have legally been divided into two or more apartments, known locally as PPE,” says Koch de Gooreynd. “These would require a purchase in the name of more than one adult. If you were buying with a family member for example, that could include a child aged 21 or over but not with your husband or wife as legally they are considered one entity.”

The Lex Koller also decrees that property bought as a holiday home can only be rented for around 10 months each year and it may not be sold at a profit within the first five years of ownership.

Location location location

With properties around the cities of Geneva, Zurich and Berne not available to non-Swiss purchasers, the main locations these buyers focus on are the Alpine ski resorts and around the lakes of Montreux and Lugarno.

“Buyers need to consider the lifestyle they want,” says Koch de Gooreynd. “Do they have children at the international schools in Verbier or Villars? Do they want to be close to the mountains for summer and winter activity or close to a busy city? Montreux offers a wonderful lakefront lifestyle, midway between city life in Geneva and the mountains for winter skiing and summer hiking. One of my clients chose to live in Clarens because as he said, he was one hour from parking at Geneva airport and one hour from the Médran gondola lift in Verbier.”

Montreux, facing Lake Geneva, looking across to France and shielded by the high hills behind, sits on the Swiss Riviera, so called for its warm and sunny microclimate. The town’s flower-filled streets and waterfront promenade are a major attraction, as are the many annual festivals and events, led by the Montreux Jazz Festival every July.

“There’s always plenty going on in Montreux and many people who live in Geneva like to weekend there, increasing your pool of buyers when you come to sell,” says Koch de Gooreynd. “Other popular areas on this northern side of Lake Geneva where non-Swiss are permitted to buy include the vineyard filled area of Mont Pèlerin above Vevey, nearby La Tour-de-Peilz and Villeneuve, especially favourite with British clients. Vevey itself however is not a designated holiday zone.”

The mountain resort of Verbier has become one of the most sought-after addresses in the Alps, both for its superb skiing and for its high quality homes.

“The resort of Andermatt in Central Switzerland is an anomaly among the Swiss rules for second homeowners,” says Koch de Gooreynd. “It is the only Swiss resort that has been given full exemption from the Lex Koller meaning that non-Swiss investors are free to buy and sell apartments and penthouses there as they wish. It has wide international appeal and is truly year-round with an 18-hole golf course and a vast ski area now under the control of Vail Resorts.”

Andermatt is a traditional resort ninety minutes from Zurich airport where its new and modern infrastructure is matched with impressive eco-credentials: all the heating and electricity in its new buildings are carbon neutral. That includes Gilda, a building of eight apartments and four penthouses in a sleep Bauhaus-inspired design. Homes for sale include a three-bedroom duplex penthouse with a private sauna and loggia. Priced at CHF3,950,000, the penthouse has grand ceiling heights and includes access to a communal spa, gym and wellness area.

“For second home buyers in Switzerland, a final option is to purchase a Hotel Residence,” says Koch de Gooreynd. “These are classified as commercial properties and so exempt from the Lex Koller regulations. Do look carefully at the rules of use however as often these come with a rental obligation and a maximum period of personal usage.”