What happened? The Federal Court ruling on business apartments
The Federal Supreme Court ruling 1C_401/2024, the minimum residential share and what now applies — in detail.
In April 2026 the Federal Supreme Court upheld a ruling that fundamentally changes the market for furnished short-term letting in Zürich. Anyone who owns or operates business apartments should know the key points.
The legal basis: BZO Art. 6 and 40
The City of Zürich building and zoning ordinance (BZO) sets a minimum residential share for many zones — a portion of floor area that must serve permanent housing. The BZO revision clarified that temporarily let second homes no longer count towards that share.
The appeal and ruling 1C_401/2024
Four business-apartment operators challenged the provision. In ruling 1C_401/2024 of 30 April 2026 (published 25 June 2026) the Federal Supreme Court dismissed the appeal: the city may exclude temporarily let second homes from the minimum residential share.
«Temporarily let second homes may be excluded from the minimum residential share.»
Federal Supreme Court · ruling 1C_401/2024
The test: when does a unit drop out of the residential share?
The condition is cumulative: a unit only stops counting as “housing” when it is (1) regularly let on fixed terms of under one year AND (2) nobody with a registered main residence lives there. If only one condition is met, it remains housing under the residential share.
What does this mean in practice?
- New use as a business apartment in the residential share requires notification and a building permit — even without structural conversion.
- Commercial short-term lets are not protected by grandfathering.
- Affected units must be converted back to long-term living.
For owners and operators: anyone short-letting in the residential share today needs a plan by autumn 2026 — otherwise enforcement and lost income loom.
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