Sweden is the largest of the Nordic countries with a population of about 9.3 million that is quite spread out. This peace-loving country has not been involved in any major wars for more than 200 years and has a parliamentary democracy and a constitutional monarchy. The combination of Sweden's stability with the high standard of living means that the country is very multi-cultural and all this diverse population live together in relative harmony. There are no legal restrictions on foreigners buying property in Sweden.

Privacy is well respected in Sweden and famous people who have visited have been pleasantly surprised to find that they don't get bothered. Swedish is the main language but most people speak English making things easy for visitors and expats. Property prices are surprisingly reasonable too. Though, like most of the world, the property boom in Sweden finished in 2008, there are still some great bargains to be had. The average price for a property in Sweden is 153,374 GBP.

Sweden and the EU including links to Swedish government sites and Tourist Information.

Property purchase process: There are no legal restrictions on foreigners buying property in Sweden.

The property process is swift and easy. Initially it involves the negotiation of a purchase agreement. At the same time, deed verification and a property survey occurs. Once an agreement is reached and the deed is validated and the property has been ‘cleared’ by the surveyor. A purchase agreement/contract is signed by the buyer and seller. The purchaser then pays a deposit ranging from 2% to 10% of the purchase price.

Upon the actual transfer of the property the parties, or their representatives meet and carry out apportionment of service charges, rent, interest, and insurance premiums, formalize the purchaser's assumption of any loan related to the property (if so agreed) and the purchaser will pay the net purchase price in cash.

At this stage the vendor will issue a bill of sale stating that the transfer of title to the property has been completed and that the purchase price has been paid.

The transaction concludes when the buyer forwards the bill of sale to the Land Registration Authority and the transaction is made public and the transfer is acknowledged by the state.

In Sweden, the purchase of a residential property usually proceeds with only a broker’s or an agent’s services and does not necessarily involve the services of a lawyer, but as a foreigner it would be advisable, particularly if you don’t speak the language.

It takes an average of two days to complete the sole procedure needed to register a property in Sweden.

Fees/Costs: Stamp Duty and Registration fee:
Buyers pay the stamp duty (1.5% of value) together with the registration fee of SEK825 (€88.50).

Agent's fee: Estate agent's fee is paid by the vendor and is generally negotiable between 3% and 5%.

Taxes: Non-residents are liable to tax on their Swedish-sourced income. Married couples are taxed separately.

When computing the taxable income, actually incurred annual costs such as property tax, insurance, maintenance, water, electricity, some less extensive repairs of the property and management fees are all deductible. Depreciation is also deductible when calculating business but not capital income and annual depreciation rate for buildings is 2%.

Rental income from private property is considered to be income from capital, and taxed at a flat rate of 30%. Private property is defined by law as a property that the owners are using or planning to use as their residence.

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.

Rental income from a property that the owners do not intend to use as their residence will be considered business income.

Municipal Taxes; Properties with residential buildings are subject to a municipal fee, which formally is a state property tax. For properties with one-or-two family homes, municipal property fee is levied at either the 0.75% of the property’s assessed value or SEK6,000 (€641), whichever is higher. Property owners of apartment buildings (hyreshus) should pay either SEK1,200 (€128) or 0.5% property tax on the assessed value for the residential part of the property, whichever is higher. This fee is deductible when calculating business income tax.

If the property is less than ten years old, the municipal property fee will be lower. New built buildings are exempt from property fee up to the fifth year. Subsequent years up to the tenth year, the fee is reduced by 50%.

Property tax is levied at 1% of the assessed value for commercial purposes and 0.5% for industrial properties.

Mortgages/Loans: Foreigners are able to obtain a mortgage against a property in Sweden. Generally, buyers can borrow up to 75 per cent of the property’s value on fixed rates over a period of approximately 20 years.

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may also vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.

08-11-2009