Art. 26 FC — Guarantee of Property

#Doctrine

#1. Legislative History

N. 1 The guarantee of property has been recognised in Switzerland as unwritten constitutional law since the 19th century and was incorporated into the then Federal Constitution in 1969 as Art. 22ter. Art. 26 of the 1999 Federal Constitution (FC) continues that provision in almost its entirety. In the Federal Council's dispatch of 20 November 1996, the consolidation was described as one of continuity: the provision should «largely adopt the existing Art. 22ter FC» and safeguard the institutional guarantee, the guarantee of continued existence, and the value guarantee of property (BBl 1997 I 172).

N. 2 Deliberately not carried over was the enabling provision in Art. 22ter para. 2 of the former FC, which authorised the Confederation and the cantons to provide for restrictions on property and expropriations in the public interest. The Federal Council noted that this authorisation was superseded by Art. 36 FC (BBl 1997 I 173). Nor was a social obligation attached to property along the lines of Art. 14 para. 2 of the German Basic Law (Grundgesetz) enshrined (BBl 1997 I 174). The corresponding minority motion by National Councillor Jutzet (SP, FR) was rejected during the parliamentary deliberations in 1998.

N. 3 In the National Council an intensive debate arose concerning the principle of compensation. National Councillor Gysin (SP, BS) moved that expropriations be compensated merely «adequately» rather than «fully»; National Councillor Baumberger (CVP, ZH) sought to introduce an obligation of «adequate» compensation for restrictions on property falling short of the expropriation threshold. National Councillor Schlüer (SVP, ZH) objected: «Whoever restricts property destroys it. Therefore, property, where a restriction occurs in the public interest, must be compensated 'fully', not 'adequately'.» The Council of States agreed — on the motion of rapporteur Marty Dick (FDP, TI) and Federal Councillor Leuenberger — with the Federal Council's wording of «full compensation». The National Council had initially inserted the Baumberger addendum providing for «adequate compensation» for other restrictions on property; Council of States member Marty Dick pointed out that this would «completely change the system» and have «financially difficult to calculate consequences». In the conciliation procedure the Baumberger addendum was not adopted; the Conference of Conciliation approved the version without that addendum, thus settling the current two-paragraph structure.

N. 4 In the French language version, unlike the old wording of Art. 22ter of the former FC («juste indemnité»), the constituent assembly chose the new expression «pleine indemnité» in order to eliminate the discrepancy between the German and French versions. Council of States member Marty Dick stated: «La doctrine et la jurisprudence ont affirmé à plusieurs reprises que ce sont bien les versions allemande et italienne qui sont correctes: elles expriment le principe de l'«Eigentumsgarantie als Wertgarantie».» The Federal Supreme Court had already confirmed in BGE 127 I 185 E. 3 that the expression «juste indemnité» in the Valais cantonal constitution corresponded in substance to «full compensation» within the meaning of Art. 22ter para. 3 of the former FC (BBl 1997 I 174).

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#2. Systematic Classification

N. 5 Art. 26 FC is an economic fundamental right (→ Art. 27 FC Economic Freedom) and is situated in the third chapter of the Federal Constitution on fundamental rights (Art. 7–36 FC). It is a classic defensive right that limits state interference with private property, but also contains an institutional guarantee. As a fundamental right it binds the Confederation and the cantons pursuant to Art. 35 para. 1 FC; direct third-party effect between private persons is rejected.

N. 6 The guarantee of property is closely linked to Art. 36 FC (Restriction of Fundamental Rights): every interference with property that does not constitute a formal expropriation or a material expropriation within the meaning of para. 2 must satisfy the three conditions for restrictions — a legal basis, public interest, and proportionality — and may not impair the essence of the right (Art. 36 para. 4 FC). ↔ Art. 36 FC. Cross-references also exist to → Art. 5 FC (Rule of Law), → Art. 8 FC (Equality before the Law in matters of compensation), and → Art. 27 FC, since both provisions protect economic activity.

N. 7 In international law, Art. 26 FC corresponds to Art. 1 of Protocol No. 1 to the ECHR (Protocol No. 1 ECHR), which guarantees the right to the peaceful enjoyment of possessions. The European Court of Human Rights applies a three-tier concept: protection of property, control of the use of property, and deprivation of property, which structurally corresponds to the Swiss concept of the guarantee of continued existence, the guarantee of use, and the value guarantee. ECHR case law is to be drawn on supplementarily in interpreting Art. 26 FC, but does not establish an independent right to compensation under Swiss law going beyond Art. 26 para. 2 FC.

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#3. Elements of the Provision and Normative Content

3.1 Scope of Protection (Para. 1)

N. 8 The guarantee of property provides protection on three levels: (a) Institutional guarantee: Private property as a legal institution must be preserved in its essential features; the legislature may not hollow it out or abolish it. (b) Guarantee of continued existence («guarantee of property in the strict sense»): Specific property rights of the individual are protected against interferences equivalent to deprivation. (c) Value guarantee: In the event of expropriation or a restriction equivalent to expropriation, full compensation is owed (Art. 26 para. 2 FC). This triad was expressly confirmed in the dispatch (BBl 1997 I 172) and corresponds to settled case law since BGE 96 I 557.

N. 9 The personal scope of protection covers natural persons and legal persons as well as private-law collectives. Public-law corporations may in principle not invoke Art. 26 FC when acting in a sovereign capacity. The material scope of protection encompasses all property rights of monetary value under private law: immovable property, movable property, limited rights in rem (easements, mortgage rights), contractual rights with monetary value, and — according to Federal Supreme Court case law — also concessions and public-law licences with a monetary content (BGE 132 II 485 E. 5). Vested rights also fall within the scope of protection (Häfelin/Haller/Keller/Thurnherr, Schweizerisches Bundesstaatsrecht, 10th ed. 2020, N 2071).

N. 10 The scope of protection extends not only to the legal entitlements flowing directly from ownership, but also to certain factual prerequisites for the exercise of those entitlements. The Federal Supreme Court in BGE 126 I 213 E. 1b departed from its earlier practice and recognised that riparian owners may invoke the guarantee of property against the abolition of common use of a public road, provided that this impairs the usability of their property.

3.2 Restrictions and Review of Interference

N. 11 Restrictions on property are permissible if they satisfy the conditions of Art. 36 FC: a legal basis, public interest, and proportionality. For minor interferences with the guarantee of property a law in the material sense suffices; for serious interferences a clear and unambiguous basis in a formal act of parliament is required (BGE 130 I 360 E. 14.2). In the zoning context, the balancing of interests pursuant to Art. 3 and Art. 14 et seq. of the Federal Act on Spatial Planning (SPA; SR 700) is determinative; the Federal Supreme Court reviews proportionality and the public interest in principle with full cognition (BGE 132 II 408 E. 4.3).

N. 12 The guarantee of property is of particular significance in tax law: taxation is to be qualified as confiscatory, and thus as a violation of Art. 26 FC, only if the income from assets is permanently insufficient to cover the tax burden. A temporary burden exceeding income in a single tax period does not suffice (BGE 143 I 73 E. 5.1–5.2). The Federal Supreme Court has thereby qualified sustained taxation into the substance of assets as an interference with the essence of the right of property.

3.3 Formal and Material Expropriation (Para. 2)

N. 13 Art. 26 para. 2 FC covers two situations: (a) Formal expropriation: Compulsory state withdrawal or restriction of a specific property right by sovereign act, generally based on the Federal Act on Expropriation (ExprA; SR 711) or cantonal expropriation law. (b) Material expropriation («restriction on property equivalent to expropriation»): A restriction on property under public law whose effect is equivalent to a formal expropriation without following the formal expropriation procedure. The Federal Supreme Court distinguishes two cases: first, complete or near-complete deprivation of the possibility of use; and second, a special sacrifice imposed on an individual or small group for the benefit of the general public (Häfelin/Haller/Keller/Thurnherr, op. cit., N 2083 et seq.; Rhinow/Schefer/Uebersax, Schweizerisches Verfassungsrecht, 3rd ed. 2016, N 1842 et seq.).

N. 14 With regard to material expropriation in cases of non-zoning or de-zoning, settled case law holds: non-zoning is subject to a compensation obligation if the land was already serviced and suitable for development and the owner was entitled to rely on its inclusion in a building zone (so-called «existing zoning rights»). Material expropriation by downzoning requires that the existing possibility of use be prevented not merely temporarily and that a serious special sacrifice be present. The Federal Supreme Court held in BGE 139 II 243 E. 10.5 that a time-limited capping of secondary residences, to be implemented through implementing legislation, constitutes a «merely temporary restriction of the guarantee of property» between the date of the vote and the enactment of the implementing provisions, for which no high requirements as to normative precision are to be imposed.

N. 15 The compensation obligation under Art. 26 para. 2 FC is mandatory and can neither be excluded by cantonal law nor shifted to a period in which the interference has already occurred. Art. 5 para. 2 of the Spatial Planning Act (SPA; SR 700) concretises the constitutional right under the FC for material expropriations resulting from spatial planning and binds the cantons with respect to the calculation of compensation. The Federal Supreme Court clarified in BGE 127 I 185 E. 4 that in such cases there is no room for involuntariness supplements going beyond full compensation. By contrast, the cantons may grant compensation exceeding full compensation in formal cantonal expropriation proceedings that are not based on the SPA.

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#4. Legal Consequences

N. 16 Paragraph 1 confers on the individual a constitutional subjective right that may be asserted by way of a constitutional complaint (Art. 113 BGG) and an appeal in public-law matters (Art. 82 et seq. BGG). At the legislative level it binds the federal legislature not to eliminate private property in its substance (institutional guarantee). At the level of implementation, all interferences must satisfy the conditions of Art. 36 FC.

N. 17 Paragraph 2 establishes a directly applicable constitutional right to compensation in cases of formal and material expropriation. «Full compensation» means: complete reimbursement of the loss caused by the expropriation (market value of what is expropriated plus any further loss such as depreciation of the remainder, relocation and fitting-out costs, etc., less any advantages). Compensation is intended to make the person expropriated whole, not to enrich them. For the entitled party this gives rise to an actionable claim in expropriation proceedings (Art. 16 et seq. ExprA) or, in the case of material expropriation, in proceedings to challenge the relevant planning enactment. → Art. 5 para. 2 SPA.

N. 18 A violation of Art. 26 FC by an impermissible interference without an adequate legal basis results in the annulment of the contested order or decision. Absent or insufficiently assessed compensation gives rise to a corresponding claim for supplementary compensation. In cases of state seizure and subsequent disposal or destruction of property without an adequate legal basis, the state violates Art. 26 para. 1 in conjunction with Art. 36 para. 1 FC (BGE 130 I 360 E. 14.2).

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#5. Controversial Issues

N. 19 Social obligation of property: During the parliamentary legislative process of 1998, it remained contested whether the social obligation of property along the lines of Art. 14 para. 2 of the German Basic Law should be incorporated into the new constitution. The majority of both the National Council and the Council of States rejected this. In academic writing, Müller/Schefer (Grundrechte in der Schweiz, 4th ed. 2008, pp. 729 et seq.) criticise the fact that the absence of an express social dimension conceals the societal character of property and perpetuates a purely individualistic conception. Rhinow/Schefer/Uebersax (op. cit., N 1862), however, emphasise that the social obligation of property is immanent even without express constitutional entrenchment, through the general conditions for restricting fundamental rights (Art. 36 FC, public interest) and the legislative competence of the Confederation and cantons in the fields of spatial planning, construction, and environmental protection law.

N. 20 All-or-nothing principle in material expropriation: Current law applies a binary solution: either the interference crosses the expropriation threshold and triggers a full compensation claim, or it falls below it and must be tolerated without compensation. National Councillor Baumberger characterised this «all-or-nothing principle» in the parliamentary debate as unsatisfactory, since it made losses of up to 40–45% tolerable without compensation. Häfelin/Haller/Keller/Thurnherr (op. cit., N 2083) consider a reform towards graduated compensation payments to be worth discussing as a matter of legal policy, but not required de lege lata, since the constituent assembly deliberately rejected the introduction of a general right to compensation for restrictions on property falling below the expropriation threshold.

N. 21 Scope of «full compensation»: While case law limits full compensation to reimbursement of the loss caused by the expropriation (objective loss, possibly plus a subjective loss), individual cantons have historically granted involuntariness supplements exceeding the loss. The Federal Supreme Court clarified in BGE 127 I 185 E. 4 that Art. 26 para. 2 FC does not prohibit the cantons from granting compensation exceeding the full loss in formal cantonal expropriation proceedings — but only to the extent that special federal norms (in particular Art. 5 para. 2 SPA) do not exhaustively govern the calculation of compensation.

N. 22 Concessions as protected property: It is recognised that property positions under concession law with monetary value fall within the scope of protection of Art. 26 FC (BGE 132 II 485 E. 5). The extent of that protection is, however, disputed: since concessions are granted by the state and subject to conditions, the question arises as to how far the concessionaire had to expect modification or withdrawal of the concession. The Federal Supreme Court has emphasised that the withdrawal of a telecommunications concession constitutes a serious interference with the guarantee of property requiring a careful balancing of interests (BGE 132 II 485). Müller/Schefer (op. cit., pp. 737 et seq.) favour a graduated approach that takes into account the protection of legitimate expectations and the inherent conditions of the concession when reviewing the interference.

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#6. Practical Notes

N. 23 When asserting a violation of Art. 26 FC, the interference must first be identified and classified by severity. A serious interference (e.g. deprivation of all economic usability of a parcel of land, destruction of seized objects) requires a clear basis in a formal act of parliament (BGE 130 I 360 E. 14.2). For minor interferences a law in the material sense suffices; review is limited to arbitrariness.

N. 24 The question of whether a material expropriation exists arises frequently in spatial planning law. Relevant points of examination are: (a) Had the prior use already been realised, or was it at least certain to be realisable in the near future? (b) Is there a substantial loss in value (under older case law the Federal Supreme Court tolerates losses of up to 40–45% without compensation, which National Councillor Baumberger described as a «hollowing out of the value guarantee»)? (c) Does the interference impose a special sacrifice on the owner as against the general public? If these questions are answered in the affirmative, the compensation claim under Art. 5 para. 2 SPA and Art. 26 para. 2 FC is to be asserted.

N. 25 In tax law, taxation is not confiscatory merely because the tax exceeds income in a single period (BGE 143 I 73 E. 5.2). What is decisive is the burden over time; the accumulation of assets by retention of earnings precludes the confiscatory character to the extent that the taxpayer participates in the appreciation of the assets.

N. 26 In cantonal expropriation proceedings it should be noted: the cantons may exceed full compensation in formal cantonal expropriation proceedings (outside the scope of Art. 5 para. 2 SPA and federal expropriation law) (BGE 127 I 185 E. 4). However, as soon as special federal norms govern the calculation of compensation, those norms are mandatory and do not permit cantonal supplements.

N. 27 The temporal dimension is also of practical significance: new planning-law restrictions apply as a rule from their entry into force also to pending applications, unless transitional provisions provide otherwise. The Federal Supreme Court clarified in BGE 139 II 243 E. 10.5 that even directly applicable constitutional provisions (such as the prohibition of secondary residences under Art. 75b FC) restrict the guarantee of property only temporarily while the legislature enacts the implementing legislation, and that no high requirements as to normative density are to be imposed for such time-limited measures.

#Case Law

#Core Content of the Property Guarantee

BGE 130 I 360 of 13 July 2004 Destruction of confiscated cannabis during investigation proceedings The provision of the Bernese Criminal Procedure Code on the early disposal of confiscated objects does not constitute a sufficient legal basis for the early destruction of confiscated cannabis.

«According to Art. 26 para. 1 Cst, property is guaranteed. An interference with the property guarantee requires a sufficient legal basis. Furthermore, it must be justified by a public interest and be proportionate (Art. 36 Cst). A serious interference with the property guarantee requires a clear and unambiguous basis in formal law.»

BGE 126 I 213 of 28 June 2000
Legal status of adjoining owners in the abolition of access
Adjoining owners cannot be denied from the outset the right to invoke the property guarantee against the abolition or restriction of the common use of a public object (change in case law).

«Adjoining owners cannot be denied from the outset the right to invoke the property guarantee against the abolition or restriction of the common use of a public object.»

#Expropriation and Right to Compensation

BGE 127 I 185 of 30 May 2001 Involuntariness supplement to cantonal expropriation compensation The federal constitutional principle of full compensation does not prevent the cantons from compensating the expropriated parties for more than the entire damage in the context of formal cantonal expropriations.

«The federal constitutional principle of full compensation does not prevent the cantons from compensating the expropriated parties for more than the entire damage in the context of formal cantonal expropriations and thus providing compensation that exceeds the framework of the claim to full compensation.»

BGE 138 II 77 of 9 December 2011
Expropriation of neighbourhood claims due to aircraft noise
For the schematic assessment of aircraft noise-related damage to apartment buildings, the Federal Valuation Commission may apply a hedonic valuation model.

«In the development of a valuation model by a team of experts under the leadership of a specialist judge of the FVC, the provisions on external expert opinions do not apply, but transparency and the procedural rights of the parties must be guaranteed.»

#Material Expropriation and Property Restrictions

BGE 139 II 243 of 22 May 2013
Restriction on second home construction
Art. 75b para. 1 in conjunction with Art. 197 No. 9 para. 2 Cst contains a directly applicable building permit prohibition for second homes in municipalities where the 20% share is reached or exceeded.

«Art. 75b para. 1 in conjunction with Art. 197 No. 9 para. 2 Cst contains a directly applicable building permit prohibition for second homes in municipalities where the 20% share is reached or exceeded. This prohibition applies to all building permits that have been granted at first instance in the affected municipalities since 11 March 2012.»

BGE 146 I 70 of 14 November 2019
Municipal provisions on affordable housing construction
The provisions incorporated into the Building Code of the City of Bern to ensure a sufficient supply of affordable rental housing can be interpreted in such a way that they are not fundamentally associated with unjustified interferences with the property guarantee.

«The provisions incorporated into the Building Code of the City of Bern to ensure a sufficient supply of affordable rental housing are compatible with the principle of the primacy of federal law. They can be interpreted and implemented in such a way that their application is not fundamentally associated with unjustified interferences with economic freedom or the property guarantee.»

#Confiscatory Taxation

BGE 143 I 73 of 5 January 2017
Property guarantee and prohibition of confiscatory taxation
The constitutional property guarantee is not already violated when in a single tax period the tax burden exceeds the property income. The decisive factor is the assessment on a permanent basis.

«Since wealth tax has the substance of wealth as its object and economic capacity is determined precisely by its amount, and since taxation is only considered confiscatory if the property income is permanently insufficient to cover the tax burden, the constitutional property guarantee cannot be considered violated merely because in a single tax period the tax burden exceeds the property income.»

#Criminal Procedure Law and Property Guarantee

BGE 135 I 209 of 11 June 2009
Obligation to compensate for confiscated weapons and weapon components
The Weapons Act contains no legal basis for the confiscation of the net proceeds from the disposal of objects confiscated for security reasons in favour of the state.

«The Weapons Act contains no legal basis for the confiscation of the net proceeds from the disposal of objects confiscated or seized for security reasons in favour of the state. If the object can no longer be returned or handed over to the owner, appropriate compensation must be provided.»

BGE 141 IV 305 of 23 June 2015
Illegal demolition of a protected single-family house
When establishing a substitute claim, the gross principle must be applied, whereby the property guarantee must be observed.

«Application of the gross or net principle when establishing a substitute claim (summary and confirmation of case law). The application of the gross principle leads to a proportionate result in property interferences that takes into account the constitutional requirements of the property guarantee.»

#Administrative Procedure Law

BGE 132 II 485 of 26 October 2006
Amendment, transfer and withdrawal of a telecommunications licence
The withdrawal of a licence constitutes a serious interference with the property guarantee that requires careful weighing of interests.

«The withdrawal of a telecommunications licence, which as a valuable right falls under the protection of the property guarantee, requires careful weighing between the public interest and the legitimate interests of the licence holder.»

#Spatial Planning and Property Guarantee

BGE 140 I 176 of 27 March 2014
Legal qualification of a levy on unmanaged second homes
The second home tax aims at better utilisation of existing second homes and does not constitute a confiscatory interference with the property guarantee.

«The second home tax aims in particular at better utilisation of existing second homes in the municipal territory. Since a steering effect is at least potentially present and the tax is proportionately designed, there is no violation of the property guarantee.»

#Fundamental Rights Conflicts

BGE 136 I 17 of 23 November 2009
Protection from passive smoking and property guarantee
The smoking ban in restaurants constitutes a justified and proportionate interference with the property guarantee that is legitimised by the protection of health.

«The fact that the Bernese legal order for protection from passive smoking provides no special regulation for the consumption of water pipes in restaurants does not violate constitutional law, in particular not economic freedom, the property guarantee or the prohibition of discrimination.»