Before even discussing price or financing, a foreign buyer must answer one question: does the Lex Koller apply to me? The federal law on the acquisition of real estate by persons abroad (LFAIE) decides who can buy what in Switzerland — and Geneva applies it strictly. Here is the complete picture: the free cases, the cases subject to authorisation, and the pitfalls that case law has already closed on poorly advised buyers.
A law born from the fear of “selling off the land”
Adopted in 1983 to prevent foreign control over Swiss land, the LFAIE owes its nickname — Lex Koller — to former federal councillor Arnold Koller. Relaxed in 1997 so as not to discourage investments useful to the economy, it has since rested on a triple filter: who is buying, what the transaction represents legally, and what the property is intended for. Just one of the three filters is enough to trigger the authorisation regime.
Who is a “person abroad” — and who is not
The law applies to: EU/EFTA nationals not domiciled in Switzerland; nationals of other states who do not have the right to settle there; companies with their registered office abroad — or in Switzerland but under foreign control; and any person who buys on behalf of a person abroad. Exempt from it: Swiss nationals, wherever they live; EU/EFTA nationals domiciled in Switzerland (permit B or C); and nationals of third states holding a permanent residence permit C. For them, buying in Geneva is unrestricted, just as for a Swiss national.
Permit B outside the EU: a main residence remains possible
This is the question we are asked most often, and the answer is more open than people think: a national of a third state holding a valid residence permit (permit B) can acquire, without authorisation, the home that serves as their main residence, at their place of domicile (art. 2 para. 2 let. b LFAIE). The condition lies in the use: they must actually live there — not rent it out, not leave it empty. Our guide to settling in Geneva details the full process, and the lump-sum tax regime (forfait fiscal) will be of interest to those settling there.
Cross-border workers: a specific route
A cross-border worker who is an EU/EFTA national can acquire a secondary residence in the region of their workplace without authorisation (art. 7 let. j LFAIE) — a frequent case in Geneva, where thousands of cross-border workers commute every day. Only one at a time, and it cannot be rented out as long as they hold it under this status.
What the law considers as “acquiring”
The LFAIE does not look at the form, it looks at economic control (art. 4). The following are treated as an acquisition: ownership of course, but also building rights, usufruct, right of habitation, the purchase of shares in a real estate company, or even a purchase-sale agreement. Financing can also tip a transaction over: the Federal Supreme Court ruled (ATF 142 II 481) that a Swiss buyer fell under the law because her husband, domiciled abroad, provided the bulk of the financing — equity and borrowing capacity — beyond the two-thirds of the property’s value tolerated by case law. Being Swiss is not enough: it is the origin of the funds that counts.
Housing, commercial, holiday: the intended use decides
The third filter is the use of the property. Commercial premises — offices, shop units, workshops — can in principle be acquired freely, even by a person abroad: this is the major relaxation of the law since 1997. Housing, on the other hand, remains the protected area. As for holiday homes, they are only possible in tourist cantons with a federal quota — Geneva is not one of them: no holiday residence for a person abroad in the canton. And even where the quota exists, the Federal Supreme Court remains vigilant: it refused a 247 m² villa where the buyer could not demonstrate a plausible need exceeding the regulatory limit of 200 m² (ruling 2C_947/2018).
In Geneva: which office, and what remains closed
The law is federal, the authorisation is cantonal. In Geneva, the Department of Institutions and Digital Affairs is the first-instance authority for LFAIE matters, and its decision can be appealed to the Administrative Chamber of the Court of Justice.
The trigger is mechanical and worth knowing: when the land registry, the trade registry or the auction authorities cannot immediately rule out that the acquisition is subject to authorisation, they refer the buyer to the department. So it is not up to you to declare yourself: doubt alone is enough to open the procedure, and it must be resolved before the deed is signed, not during. One useful clarification too: the department states that it is not authorised to provide information or legal advice on specific cases. Do not count on a phone call to secure your structure.
There remains the list that many hope to circumvent, and which the canton publishes without ambiguity. For a person abroad, acquisition is impossible in Geneva for:
- non-subsidised housing;
- holiday homes in Geneva;
- secondary residences in Geneva — with the exception of secondary residences for EU/EFTA cross-border workers;
- purely mixed-use buildings, shops and housing combined.
This list alone explains why so many Geneva projects get redirected: the canton has no holiday home quota, and secondary residences are closed there except through the cross-border worker route. What remains open — the main residence at the place of domicile, commercial premises, the cross-border worker route — should be checked before the first viewing. This is the first question we ask, and it takes five minutes.
Circumventing the Lex Koller: the real cost
Nominee, shell company, hidden financing: such arrangements come at a heavy price. A deed concluded without the required authorisation is void, the judge can order the restoration of the previous state — up to the forced resale of the property — and criminal sanctions are added on top. For a complex transaction (company, trust, collective investment), prior analysis by a specialist is not a precaution, it is a condition for the validity of the purchase. The notary, who draws up the deed, is the first safeguard: they will not sign until the LFAIE status has been clarified.
Your Geneva project, in practice
If your status allows you to buy, the real challenge in Geneva is not legal: it is a structurally scarce market, where the best opportunities often circulate before any public listing. Start by framing your financing, then explore the properties for sale on the Left Bank — and if your LFAIE situation is uncertain, write to us: we will tell you what is possible, and put you in touch with the right specialists. Technical terms are defined in the glossary.
This article is based on a legal contribution written in February 2023 by David Bensimon, partner, SBA-certified specialist in construction and real estate law, and Emile Branca (Rhône Avocat-e-s). Editorial formatting: Rousseau 5. It does not constitute legal advice.