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The Alpine village of Lech, in Austria, where new holiday homes are banned

Buyers would struggle to find a more exclusive resort than Lech in the Vorarlberg province of Austria. It is the sort of idyllic mountain village that appeals to well-heeled foreigners who return year after year each winter, attracted by its reliable snow, vast network of pistes, stunning scenery and impeccable style.

But foreigners do not own chalets in Lech, unless they bought them more than 25 years ago. Property agents do not exist – there is no need for them. Lech owners have inherited their properties, which are passed from one generation to the next. When property does trade, an owner quietly sells to someone in the town.

And yet now, prospective outsiders have a window: four new traditional chalets are nearing completion, two of them pitched on the open market to EU citizens or an EU company. Marketed by property agents in the UK and in Germany, they are advertised as good investments.

The cluster of four chalets is being built in the heart of Lech, close to one of the area’s 84 ski lifts. Developer Jürgen Elsensohn, who inherited the land, will keep one. Another has been reserved by English buyers that Elsensohn courted before breaking ground.

One chalet has five bedrooms and is on the market for €7.7m in the UK and €8.1m in Germany. The other four-bedroom property is on the market for €5.7m and €5.8m, respectively. For some €11,000 per sq m, Elsensohn promises a high-end finish.

All the chalets have a large, southeast facing terrace, triple garage and direct lift access. The facades and balconies are made of larch, the ceilings and staircases of spruce, the flooring of oiled oak. They also benefit from underfloor heating, triple glazing, fibre-optic internet connections and video intercoms.

Interiors can still be partially built to order. On the current blueprint is a cinema room, a wine cellar and a spa, equipped with gym, hot tub, sauna, steam room and relaxation zone.

German agent Robert Rhein calls the price “a bargain”. “If I compare it to Kitzbühel [a two-and-a-half hour drive from Lech], it is not as expensive, and Kitzbühel has a plethora of properties for sale.”

Elsensohn says it took a year to win special planning permission, first to tear down the existing B&B and family home, and then to build four chalets. “It’s never been done in Lech,” he says. “This is unique.” Two factors helped Elsensohn: an ancestor of his was Lech’s first mayor in 1422; and the donation he made to his local community, the Gemeinde.

What you will not read on the chalets’ advertisements, however, is the fine print. The property permits describe them as “primary residences”, not “holiday homes”.

However, the agents seem to think the distinction is not an insurmountable problem if the owner occupies the property for much of the year, avoiding an empty chalet scenario. “Every town enforces it differently,” says Rhein. “When you rent out chalets, you’re benefiting the resort. New people come and spend money. It’s common sense.”

But local officials disagree. “Renting out the whole chalet is not allowed,” says Stefan Jochum of the mayor’s office. Owners, he says, can only rent out bedrooms if they remain on the premises as well.

“The people in Lech are very angry and they are watching this,” Jochum says. Lech residents, he argues, do not believe foreigners will buy these properties for millions and actually live in Lech, as they are meant to. “We’ll be checking them,” he says, and warns that offenders may be fined up to €25,000.

And while residents can apply for a “holiday home” permit after five years, Jochum says it would only be granted to owners who actually lived in Lech. He concedes, however, that owners may appeal a local ruling to the state court and to the EU.

Four-bed chalet, priced at €5.7m in UK

So why is Lech ultra-sensitive to foreign owners? Local residents cite two reasons. First, it has something to do with mentality. Some 700 years ago, Lech’s ancestors, who were Walsers (a Germanic people) left the Swiss canton of Valais, eager for a better life. Fanning out across Switzerland and Austria, some Walsers settled in the wilds of Vorarlberg and put down roots.

“The Walser character is to be free and independent. We call it Selbstbestimmung,” says Bruno Strolz, who owns the upmarket Haus Alpina and whose Walser family has been in Lech for generations. Walsers, he says, cherish their tight-knit Gemeinde.

Elsensohn says he understands the locals’ anger. He inherited the original property 10 years ago when his brother died, prompting him to return from Germany eight years later, after he retired. “They don’t want to sell out the homeland to foreigners,” he says, speculating that the locals are also jealous. Still, he hopes that by living in one of the chalets with his Russian wife, he can smooth relations, leading to tolerance and acceptance.

Second, local officials say foreign owners can ruin resorts. According to Jochum, that is why Lech banned new holiday homes in the late 1980s and why Switzerland voted to ban them last year. “We don’t want second homes,” he says. “If we open the law to sell and rent to foreigners, we can be sure that 25 or 30 of our B&Bs will sell. They will make the easy money. That’s what we don’t want.” He warns that selling to foreigners would raise property prices, eventually shutting locals out of the market.

Foreign owners are also accused of using chalets only two weeks a year, leaving them empty the rest of the time.

“Our Gemeinde watched developments in Switzerland,” says Strolz, “and decided more holiday homes would destroy the hotels.” According to Lech’s head of tourism, Hermann Fercher, restricting holiday homes is essential. “The revenue we get from the hotel business is much higher. It’s better for Lech.”


Buying guide

● Total purchase costs of six per cent are included in the UK purchase price

● Austrian banks will lend up to 60 per cent of the purchase price

● Mortgage fees are roughly 4 per cent of loan value

● Variable rate mortgages are available at three per cent

● Lech is about two hours’ drive from Zurich airport, and 90 minutes from Innsbruck airport

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