Despite limited serious application, Brexit will tighten the Swiss Lex Koller Act for British citizens

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With the entry into force of Brexit on December 31, 2020, British citizens will no longer benefit from preferential treatment of EU citizens when purchasing Swiss residential property. UK citizens now need a Swiss residence permit to purchase Swiss residential property without a permit. However, the grandfather applies: British nationals who are lawfully and actively resident in Switzerland before 1 January 2021 are exempt from this restriction, provided they maintain their lawful and effective residence in Switzerland. All Swiss residential properties legally acquired by UK citizens before 1 January 2021 will remain the same.


Contents

  1. Options for British citizens to buy Swiss residential property from 1 January 2021
  2. Other exceptions
  3. my knowledge

Options for British citizens to buy Swiss residential property from 1 January 2021

UK citizens not legally residing in Switzerland as of 1 January 2021:

  • An unlimited residence permit is required to purchase a Swiss residential property.
  • Before obtaining a Swiss residence permit, holiday homes can be purchased in certain cantons, provided a certain permit is available, as well as private residence at the legal and actual place of residence in Switzerland.

UK citizens legally and physically residing in Switzerland on 1 January 2021:

  • These British citizens are ancestors and are allowed to purchase Swiss residential property without permission.
  • However, it is essential that these British nationals retain their legal and de facto residence in Switzerland, at least until they acquire Swiss residential property in the future. Any cancellation of registration or change of actual place of residence from Switzerland after 1 January 2021 will result in the loss of grandfather.
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Other exceptions

Swiss property ownership before Brexit

UK citizens who legally purchased Swiss residential property before 1 January 2021 reserve the right to own this property. The UK’s exit from the European Union does not affect the legal status of residential property in Switzerland.

Cross-border travelers before Brexit

UK nationals who crossed the border into Switzerland on 1 January 2021 and subsequently retained this status will retain their post-Brexit status to purchase Swiss residential property. It continues to benefit from the exception of the Lex Koller Act, which enables cross-border travelers to purchase a second home at their workplace in Switzerland.

my knowledge

The so-called “Lexcolor rule” in Switzerland prohibits foreign ownership of Swiss real estate unless the foreign buyer has permission to do so. As commercial real estate is exempt from the Lex Koller Act, its main application is Swiss residential real estate.

Thanks to bilateral agreements between Switzerland and the European Union, the Lex Koller Act exempts foreigners from the European Union from permit requirements once they are legally and effectively residing in Switzerland. Foreigners from countries outside the European Union do not benefit from this exemption and therefore need a Swiss residence permit in order to be able to acquire Swiss real estate without a permit.

Buying Swiss residential property with a very limited permit and permits are limited in their application. Some (tourist) cantons have a quota that enables them to buy holiday homes that they use themselves.

With the exit of the United Kingdom from the European Union, the United Kingdom became a country outside the European Union. In accordance with the international agreement concluded between Switzerland and the United Kingdom on February 25, 2019 and approved by the Swiss Parliament on September 25, 2020, the transfer of Swiss real estate is regulated as follows:

  • Real estate that a British citizen legally acquired in Switzerland before 1 January 2021 will not be affected by Brexit.
  • Every British citizen with legal and de facto residence in Switzerland on 1 January 2021 may purchase Swiss residential property without permission, provided that they retain their legal and de facto residence until the acquisition of Swiss property.
  • Every British citizen with Swiss travel status on January 1, 2021, and who maintains that status, can take advantage of the exemption under the Lex Koller Act and have a second home in their work area in Switzerland.
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Approval of the Swiss-British Treaty is still subject to an optional referendum, which is highly unlikely. If there is no referendum by January 14, 2021, the Swiss-British Treaty will officially enter into force on March 1, 2021. Meanwhile, the Swiss-British Treaty has been formally implemented since January 1, 2021.

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