Tax in Sweden

Swedish Mortgages

As a general rule, Swedish mortgage providers will offer a loan of up to 75 percent of the value of the property. Generally, mortgages in Sweden are offered on fixed rates over a period of approximately 20 years.

Get a Free Quote The Swedish Tax System
Taxation in Sweden is quite complicated and can be extremely costly for foreign investors. Therefore, a basic understanding of the issues is essential for anyone looking to invest in Swedish property.

Swedish tax is paid both at a national and municipal level. Policies are determined centrally by the Ministry of Finance. The actual systems themselves are administered by the Swedish Tax Administration. Unlike in the UK, the tax year matches the calendar year.

Foreign Investors in Sweden
Taxation is payable by foreign individuals (or at least those who are recognised as being non-resident) only on income that has been generated from Swedish sources, i.e. Swedish employment or property.

Non-residents are liable for capital income tax upon the sale of any real estate that they hold in Sweden as well as being liable for a wealth tax on the net asset value of the property. Property tax is charged at a rate of 1 percent of the assessed value of the property. The assessed value of the property is 75 percent of the market value of the property.

When a property is transferred, stamp duty becomes payable (this is sometimes referred to as ¡¥transfer tax¡¦) and is 1.5 per cent for individuals.

Sweden has double taxation treaties with more than 80 countries for those investors who are considered to have dual residency. However, in order to benefit from these treaties, a ruling from the National Tax Board is necessary.

Any income that is generated from Sweden needs to be declared in the UK, if you are UK resident. This may relieve you from the need to pay taxes in Sweden under the double taxation rules. But, if you do find yourself in the position of paying Swedish income tax, you may be disappointed by the figures.

Income tax is payable at both municipal and national levels. At a local level, the tax rates may vary from 26 to 35 percent, and at a national level they may vary from 20 to 25 percent. Therefore, the overall income tax is anything between 46 percent and 60 percent. This could put a serious dent in your profits and could even make meeting mortgage payments difficult. Consequently, establishing non-residency is a vital and ongoing requirement for any Swedish investment.

Summary
Bullet Point Tax rates in Sweden are generally a lot higher than in the UK;
Bullet Point non-residents are still liable for some property taxes such as stamp duty, but may avoid the large income tax;
Bullet Point as income tax can be as high as 60 percent, establishing and maintaining non-residency can be absolutely vital for the success of the investment.

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