Substantial Amendment to Article 5, Para 1. Let. b of the General Law on Development Zones
On November 2, 2024, Article 5 para. 1 let. b of the General Law on Development Zones (LGZD) was substantially amended. It now states that “properties intended for sale are reserved for individuals subject to income tax who have been residing in Geneva for at least 4 years.”
This amendment caused panic, especially among international civil servants in the process of acquiring property in a development zone.
The issue was whether the modification of Article 5 para. 1 let. b LGZD would apply to ongoing property acquisition projects nearing finalization.
On January 29, 2025, modifications to the Regulations for the Implementation of the General Law on Development Zones (RGZD), adopted by the Cantonal Government, came into force. According to Article 25 para. 6 RGZD, “the conditions set out in Article 5 para. 1 let. b of the law in its version prior to the amendment that came into effect on November 2, 2024, apply to property transfers resulting from a promise of sale and purchase or in execution of a forward sale concluded before that date.” Furthermore, Article 25 para. 7 RGZD specifies that “the conditions set out in Article 5 para. 1 let. b of the law in its version prior to the amendment that came into effect on November 2, 2024, also apply to property transfers resulting from a sequestration agreement concerning capital gains or a reservation agreement concluded before that date, and followed by the payment of a deposit to the notary or a banking institution, also made before November 2, 2024.”
Thus, the applicability of the LGZD amendment is now clarified. Signing a promise of sale or an immovable sale agreement before November 2, 2024, is not a condition for benefiting from the previous system of the LGZD, which did not require income tax residency.
Non-resident individuals who are not subject to income tax can continue their property acquisitions if, in particular, a reservation and deposit payment were made before November 2, 2024.