The Federal Council intends to tighten the Federal Act on the Acquisition of Real Estate by Persons Abroad («Lex Koller») and has launched a corresponding consultation at its meeting of 15 April 2026, which will remain open until 15 July 2026. This consultation is part of the accompanying measures that the Federal Council decided in connection with the popular initiative» «No 10 Million Switzerland» which will be put to the vote on 14 June 2026. Various responses from the real estate industry have already been published regarding the consultation. For example, the «Alliance Lex Koller remains modern» – consisting of nine important economic and sectoral associations – stated that the regulations proposed by the Federal Council would harm Switzerland and would be incompatible with existing free trade agreements.

Housing space in Switzerland is scarce, as demonstrated by the recently published housing supply data from Wüest Partner, which shows a net 32 200 new housing units (average 2010-25: 42 460 new housing units) in 2025. When discussing possible solutions to this scarcity and the associated price effects, it is important to assess the various markets and their drivers. Residential rental prices are primarily defined by supply (developer market) and demand (user market). However, the prices of investment properties are determined on the asset market, which is largely determined by interest rates and the relative attractiveness compared to other investment classes, and which is already directly accessible only to Swiss investors today. We believe that measures leading to a rapid expansion of housing supply and thus an acceleration in the developer market are therefore promising. For example, the report commissioned by the Federal Office of Justice from Fahrländer Partner (FPRE) shows that more dynamic spatial planning is primarily necessary to mitigate the problems of the housing market. Furthermore, according to FPRE, it would be beneficial to release additional building land in the highly sought-after agglomerations. This should be able to be built on at high density and with rules regarding affordability. In this context, the consultation draft ordered by the Federal Council on 22 April 2026 to accelerate planning and building permit procedures is welcome.

We believe that more stringent interventions in the asset market would not contribute to solving the problem; rather, they would likely exacerbate it and lead to a weaker expansion of supply (developer market) in the affected segments. Furthermore, a general exclusion of foreign capital from all real estate submarkets – residential and commercial properties – would have significant negative consequences for the Swiss economy. Foreign investors can provide companies with welcome liquidity and secure jobs in crisis situations through sale-and-leaseback transactions. The hotel industry and the data centre sector would also be particularly affected. Here, the Swiss market is heavily reliant on foreign players. This would have adverse effects on digital infrastructure and weaken Switzerland’s attractiveness as a location for technology companies and data-intensive industries.

The exclusion of foreign investment capital in indirect investments would likely have resulted in delisting of listed investment vehicles due to the difficult-to-enforce controls for banks (e.g. in the case of legal entities and collective investments) before transaction execution and the resulting sanctions. While listed property companies can already decide whether they want to register the names of shareholders in the share register to fulfil the provisions of the Lex Koller (maximum 33% foreign investors for residential property companies), such options do not exist for listed real estate funds. However, as fund investors only have dividend rights but no voting rights (exception: SICAV), we believe that no tightening of regulations is necessary for foreign investors. Conversely, the damage to the Swiss financial centre and pension institutions in the event of threatened delisting would be significant. A recent comparison with German open-ended real estate funds shows that these are having to deal with significant withdrawals of capital from investors. The consequence has already been three fund closures in the first quarter of 2026. In contrast, a real estate fund has never had to be closed in Switzerland, which confirms the strength of the listed model and ultimately – most importantly – ensures that sufficient capital is available in the property market to implement important new construction or renovation projects. This aims to ensure a modern building stock that also supports environmental goals.

Following the implementation of the second home initiative and the cantonal second home taxes expected from 1 January 2029 as compensation for the abolition of imputed rental value, we believe that additional burdens in the form of quotas would be detrimental to the property market in tourist regions. For example, the proposed halving of holiday apartment quotas from 1 500 to 750 units would burden development activity in tourist regions. Restricting the sale of managed apartments to foreigners, among other things, would also jeopardise the construction and financing of new hotels (which are often only profitable through these serviced apartments), which would be negatively affected several times over by the ban in the area of commercial properties. Classic winter sports resorts are currently facing the challenge of transforming into year-round destinations due to climate change and therefore rely on new, innovative accommodation and financing concepts.

As the proposed tightening of the Lex Koller is still in draft form, we expect significant adjustments to the current bill based on the objections raised by industry players. Abandoning referral to Parliament remains a possible option, as the Federal Council already doubted at the end of November 2024 «that the easing of the Lex Koller decided in the last four decades is the cause of today’s tight property market». However, further regulatory developments (including restrictions on immigration, rent controls) need to be monitored, as these could already have a short- to medium-term impact on the property market.