Lucerne farm bought at auction: Successful foreclosure auction of a farm

With a bid of 5.07 million francs, an Aargau farmer acquired a 25-hectare Luzerne farm in a public forced auction in mid-March 2025. The official appraisal by the debt collection office was 3.9 million francs, and the successful bidder paid about 30% above the official value, securing a fully operated farm in an excellent location.

"It was a lively bidding process that lasted around 15 minutes, with nearly a hundred interested parties witnessing the tension in the gymnasium."

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1 Overview of the Property

• Location: Luzerne Central Region, outside the construction zone, with consolidated areas and modern infrastructure.
• Size: 25 ha of agricultural land (of which 18 ha arable/grassland and 7 ha forest plus farmstead).
• Type of Operation: Dairy farming with its own young cattle breeding, 90 LU stall capacity.
• Buildings: Residential house (built in 1988, renovated in 2015) and barn (2018), manure and silo facilities according to water protection regulations.

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2 Chronology of the Forced Auction

Date	Event
2022	Intra-family conflict: Father deliberately over-indebts the business to prevent takeover by son.
December 21, 2024	Luzerner Zeitung reports on the impending forced proceedings “Loophole in Agricultural Land Law.”
March 14, 2025	Public auction highest bid 5.07 million CHF.
April 29, 2025	Cantonal Office for Agriculture and Forests (Lawa) provisionally denies acquisition permit due to overpricing.
May 2025 - ongoing	Legal proceedings before the cantonal and possibly federal court to clarify the permit requirement.

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3 Legal Framework Overview

3.1 The Interaction of the Debt Collection and Bankruptcy Law (SchKG) and the Federal Law on Agricultural Land (BGBB)

Forced liquidation primarily follows the Debt Collection and Bankruptcy Law (SchKG, Art. 135 ff.). In parallel, the Federal Law on Agricultural Land (BGBB) applies mandatorily to agricultural properties. The latter requires that any acquisition is subject to a permit (Art. 61 para. 1 BGBB), explicitly even when the acquisition occurs via a forced auction.

The BGBB pursues three main objectives:

1. Ensuring self-management (permits only granted to agriculturally qualified buyers).
2. Limiting land prices, preventing speculative purchases.
3. Protecting family successors through pre-emptive and succession rights.

3.2 Why Can the Canton Deny the Permit?

• Excessive Purchase Price: If the price is far above the productive value (here: approximately 1.7 million CHF), the authority may order a price review (§ 12 BGBB-V).
• Suspicion of Evasion: If the process is allegedly manipulated to exclude descendants, the permit may be denied (BGBB Art. 64).

"In principle, it concerns the legitimacy of the process in this forced liquidation being questioned, which results in a circumvention of the provisions of the Federal Law on Agricultural Land."

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4 Economic Assessment

The auction illustrates the tension between market price and regulatory purpose. On one hand, the bid of 5.07 million CHF shows that productive agricultural businesses in Central Swiss hillside locations have high market attractiveness. On the other hand, the government intervenes through the BGBB to prevent flight of land prices. From the investor's perspective, however, the acquisition still offers potential:

• Economies of Scale: Combining with adjacent areas can reduce fixed machinery and personnel costs.
• Diversification: Additional earnings (direct marketing, agritourism) increase the revenue base.
• Long-term Value Stability: Swiss agricultural land has shown an average value increase of 2.8% per annum since 2000, with significantly lower volatility than residential properties.

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5 Opportunities and Success Factors for Future Bidders

1. Careful Market Knowledge: Traffic values vary greatly depending on the region. Pre-auctions offer the opportunity to derive comparison prices.
2. Productive Value Calculation: Those who prepare their own contribution margin calculation recognize early whether a premium remains economically viable.
3. Permit Strategy: Early coordination with the cantonal specialist office reduces the risk of subsequent rejections.
4. Legal Support: Combined expertise in SchKG proceedings and BGBB saves time, especially with contentious family situations.

FAQ on Agricultural Forced Auctions

Does the pre-emptive right of descendants also apply to forced liquidations?
Yes, but at the full auction price (§ 42 BGBB), which became a decisive obstacle in this case.

Must every bidder provide a purchase security?
Typically 10% of the bid price or a fixed minimum amount to be deposited in cash or as a bank guarantee on site.

Can the highest bidder sue for the permit?
Yes. In the canton of Lucerne, the cantonal court decides, followed by the federal court in Lausanne (Administrative Law Division).

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6 Best-Practice Learning Effects from the Luzerne Case

• Transparency Builds Trust: The public auction with clear conditions strengthens acceptance of the result among all parties involved.
• Price Discipline vs. Family Rights: Over-indebtedness to circumvent land rights may have short-term effects, but will be corrected in the long term through permit mechanisms.
• Sustainable Financing: Those who can operate the farm economically are more likely to convince authorities of the "actual" willingness for self-management.

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7 Conclusion

The successful auction of the Luzerne farm demonstrates that forced liquidations in the agricultural sector, while rare, can indeed be promising. They combine market-driven dynamics with a strict legal framework that limits land price speculation and evasion strategies. Those who prepare thoroughly, understand the numbers, and respect land law can turn a seemingly difficult situation into a success story, benefiting business development, regional agriculture, and ultimately also creditors.