Revision of Lex Koller: Impact on Indirect Real Estate Investments and Swiss Real Estate Market

On 15 April 2026, the Federal Council submitted a draft bill on the revision of Lex Koller for consultation. Through tighter regulation, it aims to further restrict the purchase of land in Switzerland by foreign nationals. According to the draft, indirect real estate investments would also be affected. Foreign nationals would only be permitted to invest in real estate funds and listed real estate companies to a very limited extent.

At this stage, the proposal is a preliminary draft. As part of the consultation process, interested parties may submit their views until 15 July 2026 and assess the draft with regard to its legal, economic and practical implications.

Against this backdrop, the Swiss Finance & Property Group (SFP Group) is closely monitoring the consultation process and, as a long-standing expert in the Swiss real estate and capital markets, is contributing its professional assessment of the draft proposal.

The role of indirect real estate investments in Switzerland

One aim of the revision is to maintain control over the Swiss real estate market. This objective can only be effectively pursued if the measures are proportionate and take into account the important role of indirect real estate investments in financing Switzerland’s real estate stock. Otherwise, unintended consequences may arise.

Many properties in Switzerland are not acquired by individuals but are financed through indirect investments. These include, for example, real estate funds and listed real estate companies. Listed and collective indirect real estate investments are not merely financial vehicles. They enable capital to be pooled and deployed for the acquisition, development, renovation, maintenance and long-term management of real estate in Switzerland. In doing so, these investments contribute not only to the creation of housing but also to the preservation of value and the gradual modernisation of the existing real estate stock.

This function deserves particular attention in the current debate. The Swiss market for collectively managed indirect real estate investments – channelled through real estate funds, real estate SICAVs, investment foundations, and Swiss real estate companies, excluding single-investor vehicles – is, according to our estimates, currently valued at around CHF 300 billion. Additional capital inflows estimated by the SFP Group at between CHF 3 billion and CHF 10 billion per year are also channelled into the market through capital increases. These capital flows should not be underestimated; they make a significant contribution to the financing, quality assurance and ongoing development of Switzerland’s real estate stock.

Already today: control remains in Swiss hands, even with regard to foreign investors

The Swiss market for indirect real estate investments is already largely regulated and protected. The relevant structures are organised, managed and supervised in Switzerland. Investors participate in the economic performance of the vehicles but do not have direct control over the underlying properties. Unlike with the direct acquisition of real estate, investment decisions, governance and the exercise of shareholder rights remain with authorised and supervised Swiss institutions. Control is therefore already in Swiss hands.

By including indirect real estate investments in the draft proposal, the Federal Council is equating the direct acquisition of property with the holding of units in indirect real estate vehicles. This equivalence does not reflect the economic reality of these investments or their governance and regulatory framework.

Complex implementation with far-reaching consequences

Significant practical challenges also arise, particularly in the case of listed vehicles. Listed real estate funds and real estate SICAVs do not necessarily maintain an investor or shareholder register that would allow for simple, continuous, and operationally feasible monitoring of the investor base. Introducing such requirements would significantly increase the administrative burden, reduce the attractiveness of these vehicles, and could even call their listing into question. The consequences would thus extend far beyond the issue of foreign capital and would also make market access more difficult for domestic investors.

Less attractive investment vehicles would in turn result in reduced capital inflows into the Swiss real estate market. It is precisely this capital that is crucial for creating new housing and the maintenance and modernisation of existing buildings.

This point is particularly important because these investments play a central role in the energy transition of the building stock. A large proportion of investors have set clear targets to reduce CO₂ emissions by 2030 and 2050. Achieving these targets requires substantial investment in energy-efficient renovations, efficiency improvements and the gradual decarbonisation of the existing stock. If access to capital is restricted, it will become more difficult to finance these investments. Consequently, the very transformation that needs to be accelerated in the coming years in the interest of sustainability could be slowed down.

Proportionate solutions for a functioning real estate market

The debate should therefore be placed in the proper context. Extending restrictions to indirect real estate vehicles will neither remedy the housing shortage nor solve other structural problems in the market. On the contrary, it could weaken established financing mechanisms, reduce market liquidity, and make investments in the existing real estate stock more difficult.

The consultation process should be used to examine these effects with due care. It is not about contrasting the protection of the Swiss real estate market with unrestricted openness. What is crucial is that the political process leads to solutions that are proportionate and practicable and continue to enable investments that contribute to the financing, maintenance and transformation of the Swiss real estate stock.