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Swiss Residence Permits & Swiss Property post-Brexit

12 Oct
Alpine Property Search October 12, 2019 0
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Swiss property laws can be confusing to foreigners, and even to the Swiss themselves. Examples include the law limiting ownership by foreigners (Lex Koller) and that which seeks to limit overbuilding (Lex Weber). Britain leaving the European Union adds another dimension of confusion and uncertainty. Hopefully this brief commentary will help to clarify what Brexit will mean for UK buyers and owners of Swiss property whether they hold Swiss residence permits or not.

Lex Koller 

The relevant law in this matter is Lex Koller, which distinguishes between Swiss residents and non-Swiss residents. Non-Swiss residents are classified as:

  • Citizens of the EU or EFTA states who do not have Swiss residence permits
  • Citizens of other states who either do not have Swiss residency status or who do, but who do not have permanent Swiss residency (the C-permit)

Lex Koller allocates an annual quota of 1500 permits for non-Swiss residents to buy holiday homes not exceeding 200m2 and in tourist areas, mostly mountain resorts. In the past few years, this quota has not been fully taken up. Even citizens of non-EU/EFTA states who have a Swiss residency permit (B or L) are covered by this law’s restrictions as it applies to their main residence.

Free Movement of Persons Agreement (FMOP)

In February and March 2019, the UK and Switzerland signed bilateral agreements safeguarding the rights of UK and Swiss citizens acquired under the Free Movement of Persons Agreement (FMOP) signed with the EU. This agreement covers the purchase of real estate in both countries.

After Brexit, UK citizens who do not have Swiss residence permits will see no change. Lex Koller will continue to require them to apply for a permit to purchase property and for that property to be a holiday home of no more than 200m2.

The situation is more nuanced for UK citizens who already have Swiss residency permits or are about to acquire them. If a UK citizen is resident in Switzerland before the UK leaves the EU, his/her rights to acquire Swiss property will be grandfathered under the FMOP. However, UK citizens who take Swiss residency after Brexit will be considered non-Swiss residents and will be subject to the Lex Koller restrictions. UK citizens with permanent Swiss residency (C-permit) are exempt from the Lex Koller restrictions.

The agreement safeguarding citizens’ rights will enter into force on the 1st November if Britain crashes out of the EU with no-deal or at the end of the transition period if a withdrawal agreement is signed.

Finally, for UK citizens with holiday homes in Switzerland and those with residency in Switzerland, it’s important to note that there is no legal obligation to sell their Swiss residential property after Brexit.

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