The National Council wants to raise the hurdles for foreign investments in the Swiss real estate market – with a bill from 2017, which was strongly rejected at the time. Now it’s the Council of States’ turn.
The Council of States is debating the Lex Koller – a long-running political issue on the subject of foreigners and the real estate market.
How open should a country’s real estate market be to people abroad and foreign money? That’s a relevant question. In London, for example, people are rightly bothered by the many rich Russians who have parked their money in noble apartment buildings and then leave them empty. Such London conditions are not possible in Switzerland. The Lex Koller, which has been in force since 1985, prohibits foreigners who are not resident in Switzerland from buying residential properties in the country. Only holiday apartments for which there are quotas are permitted.
Nevertheless, the topic of foreigners and the real estate market is also a political issue in this country. Initiatives are regularly launched to adapt the Lex Koller. At first it was all about loosening. In 1997, foreign investments in commercial real estate were permitted again for economic reasons, and since 2005 foreigners have been allowed to buy shares in listed Swiss real estate companies.
In 2007, there was even a brief discussion about abolishing the law. However, this was rejected by Parliament in 2014 because it was realized that the law protects the housing market from price-driving inflows of money from abroad. Since then, tightening has been repeatedly demanded. So far, however, none of the various attempts have come through.
Today, Lex Koller is once again on the agenda of the Council of States. The small chamber must decide whether the Federal Council should be instructed to submit the “amendment to the Federal Act on the Acquisition of Real Estate by Persons Abroad”, which it submitted for consultation on March 10, 2017, in the form of a message to the Federal Assembly .
The initiative coming from the National Council is as strange as it sounds. Should the Council of States say yes, the Federal Council would actually be commissioned to bring a revision draft drawn up five years ago to Parliament. The preliminary draft at that time was buried for good reason. The resistance in the consultation against the tightening was so great that acceptance seemed hopeless.
The fact that a majority of the National Council still wants to discuss the old bill has to do with a U-turn by the SVP. Like all bourgeois parties – and a large majority of the cantons – the SVP rejected tightening of the Lex Koller in 2017. But now the party suddenly sees it as an opportunity to make a name for itself as a fighter against high rents and real estate prices.
As expected, the initiative went through to the responsible Federal Councilor, Karin Keller-Sutter no enthusiasm triggered. In addition, all those who explained in detail during the consultation process why they were opposed to the proposal are snubbed. In addition to various associations, this also includes the conference of cantonal economics directors.
This is now appealing to the Council of States not to pull the draft revision out of the woods again, which it itself “clearly and completely” rejected. The arguments of the economics directors are likely to carry weight with the canton representatives, and the majority ratios are different from those in the National Council. It is therefore quite possible that the small chamber will reject the initiative. That would take Lex Koller off the table again – but again only temporarily, given the popularity of the topic.