FuW opinion article by Dr. iur. Alexander Schiemenz, LINDEMANNLAW, July 2026
Switzerland is arguing over a housing shortage, and the Federal Council delivers an answer: a stricter Lex Koller. The consultation has been running since 15 April 2026 and ends on 15 July 2026. For the first time, listed real estate funds, SICAVs and real estate companies are to fall under the authorisation regime. It sounds like decisive action. Above all, it is symbolism. For the bill does not address the cause of the scarcity, but the capital market that helps finance housing construction, and it does so with an instrument that can hardly be enforced in exchange trading. The political trigger is well known: after the debate over the «10-million Switzerland», the Federal Council promised accompanying measures. This reform is one of them. The driver is the optics of the immigration debate, not evidence that foreign investors are driving up rents.
« A fund unit gives no one control over Swiss land. It provides a return, and lawmakers a bogus argument. »
1. What does the bill change legally, and why is it problematic to treat a fund unit like a piece of land?
The Lex Koller pursues a single declared purpose (Art. 1 BewG): to prevent the «foreign domination of domestic land». That is a question of control over land and soil. This is precisely where the preliminary draft shifts the line. In future, «acquisition» is also to include anyone who takes over units in real estate funds, shares in real estate SICAVs or interests in real estate companies with a controlling position (Art. 4 para. 1 lit. c, cbis, d and e VE-BewG). This reverses a proven status quo: since 1 March 2013, persons abroad have been able to freely acquire regularly traded fund units. The reason was obvious. A fund unit is not a piece of real estate. It provides a proportionate return, but no power of disposal over a specific plot, no voting right over letting, conversion or sale. Whoever holds an exchange-traded real estate fund «controls» as little land as the holder of a bond controls the company to which it lends money. The reform treats a capital investment like a purchase of real estate. That is not the closing of a loophole, but a confusion of categories.
2. Why can the new rule hardly be enforced in practice in exchange trading?
Even more serious is how the new rule is to be monitored. Enforcement intervenes directly in the capital market. Exchange participants and firms that trade listed securities over the counter would have to review every relevant order, clarify whether the buyer is a person abroad, and refuse execution without authorisation (Art. 19b VE-BewG). Fund documents would have to exclude non-authorised persons abroad from the outset (Art. 67a, 71a and 118j KAG). Violations cost up to 250,000 francs (Art. 28a VE-BewG). The problem is not good will, but the mechanics. Listed funds and SICAVs do not maintain an ongoing register of their beneficial owners. In split-second trading on the exchange, the beneficial owner is often only identifiable with a delay, but the bill demands seamless control. What is operationally unachievable leads to the only remaining solution: withdrawal from the exchange. The Confederation itself writes that a delisting is the likely result. Around 44 Swiss real estate funds with a volume of nearly 80 billion francs would be affected. A measure that destroys transparency and liquidity in order to feign control is not supervision. It is an own goal.
3. How does the Confederation itself assess the effectiveness of the measure, and what do the figures say?
The strongest argument against the reform comes from the Confederation. The commissioned regulatory impact assessment concludes that the measure is «not suitable» for easing the housing market and has only a «minimal» effect on foreign land ownership. The figures are clear. Foreign investors hold around 5.32 billion francs in listed Swiss real estate funds and SICAVs, of which 2.42 billion are in the residential segment. Against this stand 26.65 billion that Swiss pension funds alone invest in real estate abroad. Whoever speaks of «foreign domination» here confuses a marginal quantity with a structural problem.
4. What further risks does the Confederation identify, and what about constitutional proportionality?
The report further warns that sectoral capital controls generally do not work, that diverted capital could push domestic investors more strongly into the market, and that a signal of isolation could harm the location and trigger countermeasures against Swiss owners abroad. As early as 2017, a similar tightening was dropped after the consultation. Constitutionally, the fundamental question of proportionality remains (Art. 5 para. 2 BV): a measure that, according to official analysis, does not achieve its goal is not suitable, and therefore hardly justifiable.
5. What does this mean for investors, and how should they use the remaining window of time?
The housing shortage is real, and it deserves serious policy: more building land, faster procedures, denser construction. A stricter Lex Koller delivers none of this. It produces bureaucracy, drives liquid capital out of transparent vehicles and shifts the problem instead of solving it. Whoever wants to improve the reform should delete or narrowly frame the provisions on indirect investments and listed securities and address only genuine control over residential building land, equally for all non-residents. The consultation runs until 15 July 2026; the bill can hardly enter into force before 2028 in any case. Investors should use this window to submit comments and review their structures. Symbolic politics has a price. It would be paid not by the housing market, but by the financial centre.
The consultation is open until 15 July 2026, and the reform is unlikely to enter into force before 2028. Now is the time to review your structures and to submit a statement. LINDEMANNLAW advises investors, funds and real estate companies on the Lex Koller reform and its implications for indirect real estate holdings. Get in touch to discuss your situation.
Read the full guest commentary in Finanz und Wirtschaft.
