Guide to Property Taxes in Sweden

Nonresidents are liable to tax on their Swedish-sourced income. Married couples are taxed separately for income tax purposes.

Income Tax

In Sweden, taxable income is classified according to source. Each category is taxed differently. The classifications are: (1) income from employment; (2) income from capital and investment; and (3) profits from business.

Rental Income

Rental income can be considered as capital or investment income, or business income.

Rental Income as Business Income

Business income is defined as income derived from an independent, commercial (yrkesmässig) and profit-making activity. If these three conditions are not met, then income earned is considered as either employment income, or income from capital.

• Business income is taxed at progressive rates. Rental income from a property that the owners do not intend to use as their residence is considered business income.
• In computing for the taxable income, actually incurred annual costs (such as real property tax, insurance, maintenance, water, electricity, some less extensive repairs of the property and realtor agency fees) are all deductible. Depreciation is also deductible when calculating business income and annual depreciation rate for buildings is 2%.
• Business income is further subject to additional taxes. These taxes are levied on the taxable income and are deductible when computing for income tax liability.
• When selling the property, depreciation is brought back through the reverse write-down method.

Rental Income as Capital Income

Worldwide rental income from private property is generally treated as capital income. Tax is calculated on the annual rental income and any other income derived from the property, after deducting related expenses. For private houses, expenses are assumed to equal a standard amount of SEK 40,000 plus 20% of the annual rental income. Special rules apply when letting apartments or when the house or apartment is rented to the owner’s employer.

Capital Gains Tax

A tax rate of 22% applies to the sale of private real property and tenant owner’s apartments. Under certain circumstances, it is possible to defer the taxation of gains, up to a certain amount, from selling a private real property when a new private real property (house or apartment) is bought either in Sweden or the EU/European Economic Area (EEA) area. 

Corporate Taxation

The standard corporate income tax rate is 20.60%, levied on income and capital gains earned by companies. This rate applies to companies incorporated in Sweden or foreign companies doing business in Sweden.

Property Holding Tax

Real Estate Tax/ Municipal Fee (statlig fastighetsskatt/ communal fastighetsavgift)

Properties are subject to a municipal fee, which formally is a state real estate tax. Real property tax is levied at rates ranging between 0.2% and 1% on the tax-assessed value of the property. The applicable tax rates depend on the property type and use.

• For residential properties such as single-family homes and apartments owned by individuals, the municipal fee is levied at either 0.75% of the property's assessed value or SEK 7,262 (€764), whichever is higher.
• For apartment buildings owned by residents' associations, the municipal fee is levied at either 0.30% of the property's assessed value or SEK 1,302 (€133), whichever is higher.
• State real estate tax is levied at 1% of the assessed value for commercial properties and 0.5% for industrial properties.

Property Transfer Tax

1.5% when the buyer is an individual (regardless whether resident or non-resident), 4.25% when the buyer is a company.

Property Buying and Selling Taxes/Costs