For Swiss citizens, buying property in Italy and Sardinia is possible but subject to specific legal restrictions that do not apply to EU or US buyers. These restrictions stem from Switzerland’s own real estate laws, particularly the Lex Koller, a 1983 federal law that limits foreign property purchases in Switzerland. Because of the principle of reciprocity in Italian law, Swiss citizens face the same limitations when buying in Italy that Italians would face when buying in Switzerland. Understanding these constraints upfront, and the legal strategies to work around them, is essential if you are a Swiss buyer considering Sardinian property.
This guide explains what Swiss citizens can and cannot buy in Sardinia, how the reciprocity principle works, what happens if you ignore these restrictions, and the practical solutions available if you want property beyond the permitted thresholds. Unlike generic guides, this one addresses the specific legal framework that applies to Swiss buyers, giving you the information you need to structure a safe and legally compliant purchase.
Can Swiss Citizens Buy Property in Sardinia
The short answer is yes, but with conditions. Switzerland and Italy have a bilateral agreement dating to 1999 that recognises the principle of reciprocity in property purchases. This means Swiss citizens can purchase property in Italy if, and only if, Italians can purchase property in Switzerland on equivalent terms. Because Switzerland restricts foreign property ownership under the Koller Law, those same restrictions apply to Swiss citizens buying in Italy, including Sardinia.
The principle of reciprocity is not discretionary. It is embedded in Article 16 of the Preliminary Provisions of the Italian Civil Code, which states that foreigners can exercise civil rights in Italy only if their country grants equivalent rights to Italians. The Italian notary, who must certify all property transfers, is legally responsible for verifying that the reciprocity condition is met before the deed can be signed. If a Swiss buyer purchases a property that violates the reciprocity limits, the deed can later be found null and void, and the buyer stands to lose both the property and the purchase price.
What the Koller Law Actually Restricts in Switzerland
To understand what Swiss citizens can buy in Italy, you must first understand what the Koller Law restricts for foreigners in Switzerland. The law, formally known as the Federal Act on the Purchase of Real Estate by Persons Abroad (LAFE), was enacted to protect Swiss property from foreign speculation and to preserve local ownership. It applies to any foreigner without a Swiss C residence permit (permanent residency).
Under the Koller Law, a non-resident foreigner in Switzerland can purchase only secondary residences or holiday homes with a maximum net living area of 200 square meters and accompanying land not exceeding 1,000 square meters. Commercial or agricultural properties can be purchased without these size restrictions, but residential purchases are tightly limited. A foreigner can acquire a property only if they obtain a cantonal authorization, which is rarely granted unless the property meets these strict criteria.
When Italy applies reciprocity, Swiss citizens face these same thresholds when buying in Italy, including Sardinia. However, there is an important distinction: Italian law does not require prior authorization from authorities. Instead, it is the notary who verifies compliance during the transaction and refuses to proceed if the property exceeds the permitted limits.
What Swiss Citizens Can Buy in Sardinia
As a non-resident Swiss citizen, you can legally purchase in Sardinia the following types of properties without exceeding reciprocity limits: secondary residences or holiday homes with a net habitable area not exceeding 200 square meters; land or parcels accompanying such residences up to 1,000 square meters; commercial properties not used for residential purposes; and properties acquired through inheritance or as a gift from a direct relative, which are exempt from size restrictions.
In practical terms, this means a Swiss buyer can acquire a small villa, a townhouse, or an apartment in Alghero or Costa Smeralda, provided the internal living space does not exceed 200 square meters and the surrounding land stays within the 1,000 square meter limit. A modest coastal property or a compact countryside retreat can work; expansive estates, large farmhouses, or properties with extensive vineyards or agricultural land cannot be purchased legally as a non-resident.
What Swiss Citizens Cannot Buy Without Establishing Italian Residency
Large villas, rural estates, farmhouses with significant acreage, vineyard properties, olive groves, agricultural land, commercial complexes with residential components, and any property that combines residential use with land exceeding 1,000 square meters are legally off-limits to non-resident Swiss citizens. This covers most of the luxury and investment properties available in Sardinia outside the narrow category of compact secondary residences.
Many Swiss buyers find this limitation frustrating because Sardinia is home to stunning countryside estates, sea-view villas with large grounds and rural properties that would be ideal for lifestyle or investment projects. Yet purchasing such properties without first establishing Italian residency would result in a deed that can be voided years later, leaving the buyer with no legal claim to the property and potentially no remedy to recover the purchase price.
The Residency Solution: How to Buy Property Beyond the Limits
The primary legal strategy for Swiss citizens who want to purchase property larger than the Koller Law allows is to establish legal residency in Italy before or concurrent with the purchase. Once a Swiss citizen becomes a legal resident of Italy, the reciprocity restrictions fall away entirely, and they can purchase any size or type of property without limits.
Establishing Italian residency requires obtaining a residence permit or visa and formally registering your residence at the Anagrafe (municipal registry) of an Italian municipality. Options include the Elective Residency Visa for those with stable passive income, a work visa, a family reunification visa or any other lawful residence status. The application process and requirements vary by visa type, but once you hold a valid residence permit and are registered as a resident in Italy, the Koller Law restrictions cease to apply to you.
The timing is important: some notaries will accept residency documentation if you have applied for and are in the process of obtaining a residence permit, though this adds complexity and risk. The safest approach is to obtain your residence permit before signing a binding preliminary contract, so that your residency status is beyond question when the notary reviews the transaction.
Using an Italian Company to Purchase Property
Another legal workaround is to purchase property through an Italian limited liability company (SRL or similar vehicle). Reciprocity restrictions do not apply to companies incorporated in Italy; an Italian company can acquire property without size limits regardless of its ownership structure. A Swiss citizen can establish an Italian company, capitalise it with purchase funds, and have that company acquire the property.
This structure requires careful tax planning because owning property through a company creates different tax consequences than direct ownership. You may face higher transaction taxes, ongoing corporate reporting requirements in both Italy and Switzerland, and potentially different capital gains treatment if you later sell the property. You will also need to navigate the Italy-Switzerland Double Taxation Treaty to avoid paying tax twice on the same income or gains.
For this reason, using a company structure should only be considered after consulting with a cross-border tax advisor who understands both Italian and Swiss law and can model the tax implications over your intended holding period.
Tax Implications for Swiss Property Owners in Sardinia
If you purchase property in Sardinia as a Swiss resident, you face tax obligations in Italy as a foreign property owner. You must pay registration tax at the time of purchase: 9 percent of the cadastral value for a non-resident buyer acquiring a second home or investment property. You will owe annual property taxes such as IMU (municipal property tax) and TARI (waste collection tax).
If you generate rental income from the property, that income is subject to Italian income tax. The Italy-Switzerland Double Taxation Treaty provides mechanisms to prevent you from being taxed twice on the same income, but this requires careful coordination and tax filing in both jurisdictions. Specifically, income earned in Italy is generally taxed in Italy first, and the Swiss tax authorities will provide a foreign tax credit against your Swiss tax liability for the taxes you paid in Italy.
Similarly, if you sell the property at a gain, you may owe capital gains tax in Italy. The treaty provides that gains from the sale of immovable property (real estate) are generally taxable in the country where the property is located, which is Italy in this case. Capital gains tax treatment varies depending on how long you held the property and whether you are registered as an Italian tax resident. Working with a cross-border tax advisor before you buy can help you understand your total tax liability and structure the purchase to minimise unnecessary taxation.
What Happens If You Buy Property That Exceeds the Koller Limits
If a Swiss citizen purchases property in Sardinia that violates reciprocity limits and the notary does not catch it, the deed appears valid on the surface. However, the property can remain permanently encumbered by the violation, and the deed can be challenged years later by Italian authorities or even by the seller’s heirs claiming the transaction was unlawful.
The consequences are severe: the buyer may lose both the property and the entire purchase price with no legal remedy against the seller or the notary, because the nullity is based on a mandatory rule of law that courts cannot overlook or waive. Insurance does not typically cover this risk, as the violation is a known legal restriction at the time of purchase.
In practice, Swiss buyers often discover this problem only years later when they attempt to resell, refinance or make changes to the property. At that point, title insurers and notaries refuse to proceed, and the buyer is left with an unsaleable property. The only remedy is to attempt legal action against the original seller or the notary who approved the invalid deed, a costly and uncertain process.
Managing a Sardinian Purchase from Switzerland: Practical Steps
Most Swiss citizens buy property in Sardinia from Switzerland and do not relocate before the purchase. The transaction can be managed remotely, but extra care is needed given the reciprocity restrictions. Your first step is to verify your precise legal status: are you a non-resident Swiss citizen (reciprocity restrictions apply), or do you already hold or plan to obtain an Italian residence permit (no restrictions).
Second, work with an Italian notary and a real estate lawyer with specific experience in cross-border transactions involving Swiss buyers and the Koller Law. Do not assume that a standard real estate lawyer understands the reciprocity framework; many do not, and this gap in knowledge can lead to a void deed. Your lawyer should verify that any property you are considering falls within the permitted thresholds before you sign a binding preliminary contract.
Third, if residency or a company structure is part of your plan, coordinate this strategy well in advance. Do not sign a preliminary contract hoping that residency will come through later; ensure legal residency or the company vehicle is in place before you become contractually bound.
Fourth, coordinate with your tax advisors on both sides to understand your total tax liability in Italy and the tax effect in Switzerland of owning Italian property. The Italy-Switzerland Double Taxation Treaty can help, but it requires proper filings and documentation.
Frequently Asked Questions for Swiss Buyers in Sardinia
Can a Swiss citizen buy property in Sardinia
Yes, but subject to reciprocity limits derived from the Koller Law. As a non-resident Swiss citizen, you can purchase a secondary residence up to 200 square meters with land not exceeding 1,000 square meters, or commercial property. To purchase larger properties, you must establish Italian residency.
What is the Koller Law and why does it affect me in Italy
The Koller Law is Swiss legislation that limits foreign property purchases in Switzerland. Italy applies reciprocity, meaning Swiss citizens face the same limits when buying in Italy. Non-resident Swiss nationals can only acquire secondary residences up to 200 m2 with up to 1,000 m2 of land.
What happens if I buy a property that exceeds the limits
The deed can be found null and void by Italian authorities or courts at any time. You would lose both the property and your purchase price with little legal recourse. This is a risk that arises from a mandatory provision of Italian law and typically cannot be insured against.
Can I establish Italian residency to avoid the limits
Yes. Once you become a legal resident of Italy with a valid residence permit, the reciprocity restrictions disappear and you can purchase property of any size without limits. You should establish residency before signing a binding preliminary contract to avoid risk.
Can I use an Italian company to buy property bigger than allowed
Yes, an Italian company can purchase without size limits. However, this structure has tax and legal implications you must evaluate with a cross-border tax and legal advisor before proceeding.
Do I owe taxes to Switzerland on Sardinian property income
Yes. If you are a Swiss tax resident, you must report Sardinian rental income or capital gains to the Swiss tax authorities. The Italy-Switzerland Double Taxation Treaty provides foreign tax credits to prevent double taxation, but coordination between both tax systems is required.
Should I buy directly or through a company
This depends on your tax situation and long-term plans. Direct ownership is simpler but subjects you to annual property taxes in Italy. Company ownership avoids the annual Swiss reporting burden on immovable property but creates corporate tax complexity. Consult a cross-border tax advisor before deciding.