Significant Affiliation: Two New Rulings on Tax Liability for Former Swedish Residents with Property in Sweden

In April 2025, the Swedish Special Tax Court, ("Skatterättsnämnden"), issued two new advance tax rulings, both concerning the concept of the tax residency ground "Significant Affiliation" due to residential property ownership in Sweden. These rulings are relevant for current Swedish residents planning to emigrate, as well as for those already living abroad.

What is Significant Affiliation?

Under Swedish income tax law, a person who has moved abroad from Sweden may still be considered fully taxable in Sweden, as if they were still a resident. This applies if the individual either spends a substantial amount of time in Sweden or has Significant Affiliation with the country.

The law outlines a number of factors to assess whether a person retains Significant Affiliation after emigrating. However, case law from the Swedish Supreme Administrative Court has narrowed the practical application of these factors. In essence, only a few of these so-called "connection points" are considered decisive when evaluating Significant Affiliation.

How does property access affect Significant Affiliation?

According to Swedish case law, if a person retains (owning or renting) their former permanent home in Sweden, they are generally deemed to have Significant Affiliation and remain fully taxable in Sweden. One should observe, however that tax treaties may limit Sweden’s right to tax certain income. In contrast, retaining a property that was only ever used as a vacation home typically does not create Significant Affiliation.

What were the circumstances in the first case?

The first case involved a married couple who had lived outside Sweden for about 25 years. They wanted to spend more time in Sweden and considered purchasing a property from their son, intending to demolish all buildings and construct a new permanent residence. One of the spouses asked the Swedish Special Tax Court whether acquiring the property from their son would result in Significant Affiliation.

The Court held that it would not. This was expected, given that neither spouse had previously lived on the property. The fact that the property was purchased from their son may have raised some questions, but it appears the son had also never lived there. In summary, the ruling aligns with the current legal situation.

What about the second case?

The second case also concerned a married couple. They currently lived in Sweden and were planning to move to another EU country with their minor child. They intended to sell their current residence but were considering keeping a former permanent home that they had not lived in permanently for about three years.

They asked whether retaining this property would result in Significant Affiliation after their emigration from Sweden.

The Swedish Tax Agency argued that keeping the property would trigger Significant Affiliation. However, the Court pointed out that by the time of the planned move, three years would have passed since the couple had last used the property as their permanent home. It also noted that their current residence was larger and of higher standard. As a result, the Court found that the property should be viewed as a vacation home, and that the couple would not retain Significant Affiliation after moving.

We at nomadtax consider this outcome unsurprising. There are several similar rulings from the Swedish Special Tax Court supporting this reasoning.

The decision is important for anyone planning to emigrate from Sweden while retaining a property they previously lived in. It also highlights, given the Tax Agency’s position in this case, that the agency may apply an overly strict interpretation of the rules. This may be relevant for individuals who have already emigrated but have been assessed as having Significant Affiliation. For such persons, a reconsideration of the agency’s decision may be warranted.