A popular initiative vote of March 11, 2012 led at the beginning of 2015 to the enactment of the Swiss Federal Act on Secondary requiring communities in Switzerland to limit secondary holiday residences to 20 percent, therefore making the more or less unlimited primary market of home construction much more attractive.
In January 2018, the Swiss Federal Supreme Court (SFSC) had a chance to render a first judicial precedent for the Community of Verbier in the Canton of Vaud by saying that the demand for first homes in the community was insufficient and that the construction project under dispute could only be approved if serious and concrete assurances of future ownership by year-round permanent residents could be demonstrated prior to construction. The highest court in Switzerland furthermore considered it problematic to authorise the construction of residences most probably never to be used as primary residences.
Finally, the SFSC ruled that the location of the property, i.e. the building zone, year-round accessibility, the distance to potential workplaces, the structural design of the apartments regarding a year-round use, the price and the circumstances of the person intending to live there (current place of residence and work, intentions to move) must be taken into account. If the future residents are not known, the demand for first homes would become the main criterion test.
Now, in a further decision of December 3, 2018, in a construction project in the legendary Gstaad Region, the SFSC refined its practise by including the purchasers' potential desires to use a home in the primary market as a secondary residence at a later date, calling the planned construction project abusive and therefore unlawful.
The Community of Saanen nearby Gstaad approved a project to build three houses with a total of twelve 3- and 4-room apartments in the upmarket and luxury segment, respectively. In 2014, the Construction, Transport and Energy Directorate of the Canton of Berne approved a complaint by opponents and referred the matter back to the community in order to further review the project. After the construction company had changed its project to use as first residence, it was granted a building permit in 2016 subject to a ban on misuse as second residence to be entered in the land register. Subsequent complaints by opponents failed, so the SFSC had to render a final ruling.
The SFSC thereby held that it is necessary to examine ex officio whether there are concrete indications as to whether the of use of the building project as a primary residence appears unrealistic. The SFSC considered that the planned apartments were originally designed as second homes and that that the construction plans remained unchanged. The layout and infrastructure of the apartments , e.g. in terms of wellness area including steam baths and jacuzzis, the size of the 3-room apartments with around 70 m2, and the future home prices spoke more in favour of top of the line holiday apartments affordable to wealthy people only, so the SFSC.
Finally, the planned apartments were to be constructed in an area where mainly second homes are located and the residents were dependent on their cars, and the there was no shortage of first homes in the Community of Saanen, as up to 15 first home apartments were not sold up to 18 further first home apartments were under construction or approved when the SFSC ruled in December 2018. At the same time, the resident population of the Community of Saanen had stagnated for years. Considering all this, the plan to market the 12 apartments as new first homes in the upper/luxury segment appeared unrealistic, as the construction company had not been able to sell even one apartment to local residents since 2012, the SFSC finally held.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.