Swedish Tax Aspects of Real Estate Investments in Sweden

Sweden is a large and geographically diverse country, stretching from the Arctic Circle in the north to the more temperate regions in the south. In recent years, international interest in Swedish real estate has grown steadily. This trend has been further driven by the weakened Swedish currency, the krona.

However, investing in real estate is never just about location or market conditions. Tax considerations play a key role in any property investment. In this article, we outline the key tax aspects of investing in Swedish real estate, including practical strategies for minimizing your tax burden.

What Are the Swedish Property Taxes?

Under Swedish law, real estate property owners pay either a municipal property fee (fastighetsavgift) or a property tax (fastighetsskatt), depending on the property type.

Residential properties, such as single-family villas and the residential parts of rental blocks, are subject to the municipal fee, whereas commercial buildings, industrial units, properties under construction, and undeveloped land are subject to the state property tax.

Both the property fee and the property tax are based on the property's deemed tax value (taxeringsvärde), with rates and caps varying by category. For example, the municipal fee for single-family homes is 0,75 % of the assessed/deemed value, capped at a set amount per house (SEK 10 074, approx. EUR 900 for 2025). The deemed value is re-assessed every sixth year, as a main rule.

Rental blocks are charged 0,3 % per apartment unit, capped at SEK 1 724 per apartment unit during 2025. If a house contains both rental apartments (for residental purposes) and for example commercial parts such as a restaurant, the latter is subject to the Swedish preprty tax (1 % rate), whereas the former is subject to the Swedish property fee. Industrial property is subject to property tax 0,5 %, without any cap.

The person who owns the property on January 1 is liable for the entire year’s tax, even if the property changes owner later. In transactions, it is often agreed between the buyer and the seller of real estate, which of the parties that should pay the property tax or fee for the year of sale.

Certain exemptions apply. Newly built villas and residential rental blocks are exempt from the municipal fee for the first 15 years - a measure to stimulate construction of new homes. Reduced fees may also apply to seniors and those receiving disability benefits. Also, forest and agricultural property is not subject to any property tax or fees, on the part of the property that does not have buildings on it. This is quite beneficial for a investor looking to purchase a forest property.

Sweden is currently reviewing its property tax framework, including proposals to abolish assessed values and simplify the system. These changes could reshape the future of property taxation.

How High is the Swedish Stamp Duty?

Like many other countries, Sweden is also levying a "stamp duty", upon transfer of the title to real estate property. This is a type of transfer tax that applies when real estate is acquired through purchase or exchange. Both the buyer and the seller are jointly liable for ensuring that the tax is paid, although in practice the buyer usually bears the cost.

No stamp duty is charged on transfers through inheritance, gift, or distribution of property in connection with divorce or estate settlement (inheritance). Similarly, mergers of properties next to each other are exempt.

The stamp duty is calculated based on the property's value, which is determined as the higher of the tax assessed/deemed value (taxeringsvärde), a certified market valuation, or the actual purchase price. Ususally the purchase price would be the basis.

For individuals (including sole proprietors) holding real estate, the rate is 1,5 %. For legal entities, such as a company, pays 4,25 %. However, condominium associations, "Bostadsrättsföreningar" do only pay 1,5 %.

This exception is quite important, as a vast majority of Swedish apartments are owned by condominium associations, which is is a type of company jointly owned by the condominium owners.

A common practice in Sweden, is to have a limited liability company owning real estate, which enables the owner to sell the real estate through selling the company. This makes the transaction not being subject to any stamp duty. There are also good income tax related reasons to transfer real estate property in this matter, as Sweden has a Participation Exemption Regime, which can render such sales of real estate holding companies tax free for the selling company.

Can Anyone Own Swedish Real Estate?

Yes, as a main rule anyone can own real estate in Sweden, independent of the person's immigration law status in Sweden. There are some exceptions however, for properties with certain attributes, such as property close to sensitive infrastructure or military installations. A non-Swedish company can own Swedish real estate, but it would be liable to Swedish taxes on income tied to the property, including a capital gain from selling the property.

It shall be mentioned, however, that Sweden as a main rule do not allow companies or other legal entities to own agricultural or forest property. For legal entities, an acquisition permit is required if the property is owned by a natural person or estate, or if it is owned by another legal entity and located in a sparsely populated or land consolidation area.

Is Holding Swedish Real Estate Through a Company Recommended?

Using a Swedish company to hold real estate can offer clear tax benefits, especially when the property is held as an investment. One of the main advantages is the possibility to sell the shares in the company instead of selling the property directly. This approach, often referred to as packaging the property, is widely used in Sweden for commercial real estate.

If the shares in the company qualify as business-related shares, which is usually the case, a sale of those shares will not trigger corporate tax on any capital gain, under the so-called Swedish Participation Exemption Regime. At the same time, no stamp duty is due, since the legal ownership of the property remains unchanged.

All rental income is taxed as business income in the company, and costs such as maintenance, heating, and property tax are deductible. That said, there are some tax traps to be aware of. Capital losses on real estate held in a company can generally only be used to offset capital gains on other real estate sold. This limitation does not apply if the property has been used actively for the company’s business purposes to a significant extent, roughly 30 percent of its functional use or value.

It is important to clarify that this strategy is not used for villas, cottages, holiday homes, or other privately owned residential properties, even if they are occasionally rented out. Such properties are not considered commercial investments under Swedish tax law, and holding them through a company typically offers no benefit. On the contrary, there is a significant risk of triggering adverse tax consequences if a shareholder or family member uses the property for personal purposes.

For larger investment properties, corporate ownership can also be useful for long-term planning or when external investors are involved. But the structure must be handled carefully to avoid unexpected tax issues.

How quickly are Titles for Swedish Real Estate Transferred?

Whereas countries in southern europe often has problems tied to transfers of title, which can concern the existence of buildings built without any permit, and long processing times at the governmental property agency, Sweden's system is robust and title transfers are processed quickly, often in just a week's time.

Also, many property-related arrends with Swedish authorities, can be handled online. To summarize, Sweden offers a safe and smooth process for property owners.

What is an Appropriate Holding Structure for an International Investor in Swedish Property?

When investing in real estate property in Sweden, one should thoroughly analyse the best structure for owning the property. In this regard, Double Taxation Agreements concluded by Sweden should be considered, as well as Swedish domestic tax law, on for example Withholding Tax on dividends from a Swedish property owning company. EU tax law can also have an important effect on the structuring.

Are you planning to acquire Swedish real estate? Contact us to receive advice on tax aspects of acquiring, holding and selling real estate in Sweden.