On 11 March 2012 the Swiss population voted in favour of legislation imposing limits on the construction of new secondary homes by a thin majority. Pending the introduction of formal statutory legislation the construction of new secondary homes has been regulated by a government ordinance (Ordinance).

Last week, the Swiss parliament debated on the draft Secondary Home Act (Act) aimed at replacing the Ordinance. The Act is expected to come into force on 1 January 2016. 

Restriction of construction of new secondary homes

The Act imposes restrictions on secondary homes at communal level, both in terms of numbers as in aggregate surface:

any commune may only have a maximum of 20% in secondary homes;

the combined gross surface of secondary homes per commune may amount to a maximum of 20% of the combined gross surfaces of all housing units.

These restrictions were contained in the Ordinance already and have now been taken over into the Act.

Any apartment not qualifying as “principal residence” is a “secondary home” 

“Principal residences” are defined in the Act. The qualification requires use by at least one individual registered as resident in the commune where the apartment is located. “Residence” is permanent presence with the intention of establishing the centre of one’s life.

By default, any apartment that does not qualify as principal residence will be deemed a “secondary home”, typically that applies to holiday apartments.

For an apartment to qualify as “deemed principal residence” it needs to be used by individuals for professional or educational purposes. Empty flats will also be considered “deemed principal residence” provided they have been unused for less than a year, are habitable and available for permanent rent or purchase. “Deemed principal residences” also include apartments for short-term-use by professional staff or as temporary residence for individuals in the hotel, medical or old age homes industry.

Exceptions to the general rule 

  • New secondary homes inside residential zones

In buildings registered as listed monument, communes otherwise with a secondary home quota exceeding 20% are under the obligation to approve the construction of new secondary homes, provided always the building cannot be conserved in any other way and its architectural value is not compromised (in particular in terms of appearance and structure). In addition, there must not be any prevailing contrary private or public interests.

  • New secondary homes outside residential zones

In buildings outside the residential zones that are of particular value to the landscape (ortsbildprägend) it is possible to build new secondary homes, always to the extent permitted under planning legislation.

  • Conversion, renovation and extension of existing secondary homes

Pursuant to the Ordinance and now also under the Act, apartments built or authorised as at 11 March 2012 (so-called “old legislation residences”) may be converted from principal residence into secondary home or the other way round. 

In addition, under the Act it will be permissible to convert, renovate or extend old legislation residences.

In addition, the surface of old legislation residences may be increased by up to 30% provided the apartment in question qualifies as principal residence or so called touristic apartment (see below). The extension of an “ordinary” secondary home will no longer be possible under the Act.

  • Touristic apartments

As under the Ordinance, communes will have to authorise the construction of new secondary homes if they are used as “tourist apartments”. 

“Tourist apartments” must be offered to the public on a permanent basis for short-term-use and they must be located in the owner‘s property or exploited as “structured accommodation business” (strukturierte Beherbungsbetriebe).

To qualify as structured accommodation business, a hotel-like operational concept including minimal infrastructure such as a reception are required and the operations must have a minimum size. Apartments offered for use or rent on an online platform will not qualify.

  • Specific rules with regard to hotels and structured accommodation businesses

By way of exception, secondary homes may also be authorised to the extent they serve cross financing of accommodation businesses that would otherwise not be sufficiently viable. 

The exception is available only if the accommodation operations remain the main activity. The surface of secondary homes used for cross financing purposes may not exceed 20% of the overall surface of the business being cross financed.

To the extent a structured accommodation business has been in existence for 25 years or more on 11 March 2012 the quota of secondary homes used for cross-financing may be raised to 50% if otherwise the operations could no longer be continued for economic reasons.

Conclusion

The Act imposes substantial restrictions on the building of new secondary homes. As a general rule, it will no longer be possible to obtain a construction permit for a holiday home in a particular commune if the ratio of its secondary homes exceeds 20%. That said, in particular in listed buildings or in buildings of particular value to the landscape new holiday homes may still be built. 

Owners of existing holiday homes will be in a better position under the Act than they were pursuant to the Ordinance as they will have quite some latitude to renovate, convert and even extend the surface of their existing apartments.