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ECONOMY

Red-Greens agree on property tax changes

The centre-left coalition has announced an agreement over property taxes, claiming that only 1 percent of Sweden's house owners will see their taxes climb if the Red-Greens win the election.

Published: 18 August 2010 10:51 CEST
Red-Greens agree on property tax changes
Valtersson (Green), Östros (Social Democrat) and Andersson (Left) in early May

“We have understood that many homeowners have expressed concern over what will happen with their property taxes when their houses are next revalued,” said Thomas Östros, Ulla Andersson and Mikaela Valtersson of the Social Democrats, Left, and Green parties respectively in a statement on Wednesday.

The Alliance coalition government presented its revision of the property tax system in 2008, with the opposition parties accepting most of the changes in 2009 with a proviso that they would impose an additional 1 percent levy on homes valued for tax purposes in excess of 4.5 million kronor ($612,463).

Sweden’s homes will be revalued for taxation purposes in 2012 and until the red-green statement on Wednesday it had been unclear how many homeowners would be affected.

“We are thus presenting a clear statement that the proportion of houses covered by the higher property tax will not increase.”

According to a Sifo survey commissioned by the Svenska Dagbladet (SvD) daily last summer the new levy would affect 1.4 percent of Sweden’s homes, amounting to around 33,000, of which 23,000 are located in Stockholm – around 7.5 percent of the total.

The Social Democrats and the Green Party have long argue for rise in the threshold for the new levy, which if left unchanged would have increased taxes by around 130 million kronor in total, but the Left Party has until Wednesday remained sceptical.

“Our red-green promise is that the accumulated tax on properties will not be increased in comparison with today’s system,” the three parties confirmed.

Thomas Östros has forecast the new threshold for the higher tax levy in 2012 will climb to a market value of around 6.5-7 million kronor, SvD has reported.

The parties have also confirmed that they plan to extend the proposed cap which limits an individual’s property taxes to 4 percent of income to cover summer houses and all groups in society. Furthermore they promised to halve the tax take on rental and tenant-owner apartments.

The Alliance coalition’s manifesto in the 2006 general election promised an abolition of property taxes, then 1 percent of a property’s taxation value (roughly 75 percent of market value).

Instead of abolition the Alliance government changed the tax into a “municipal charge” with a annual ceiling of 6,000 kronor per house and 1,200 kronor per apartment.

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PROPERTY

INTERVIEW: ‘Most foreigners in Sweden don’t know they can get back excess rent’

In Sweden, people subletting apartments are not allowed to charge more in rent than they themselves pay. But foreign subtenants don't always know this. We asked Roland Sjölin, lawyer at the Swedish Tenants' Association, about how to get back excess rent.

Published: 18 April 2024 15:19 CEST
Updated: 21 April 2024 08:12 CEST
INTERVIEW: 'Most foreigners in Sweden don't know they can get back excess rent'

More and more of the people asking the Swedish Tenants’ Association, Hyresgästföreningen in Swedish, for help with excess rent are foreigners, Sjölin told The Local in an interview.

“The problem is that if you’re coming from another country, and you’re subletting an apartment, you’re probably not familiar with the rules in Sweden, because in other countries, it might be okay to overcharge your tenants.” 

He said that clients from India in particular seeking help from the association were now “very common”. 

“Many people come here to work as engineers in the IT sector and then have to rent somewhere,” he said, adding that as a group Indians appeared to be “very aware of their rights.”

Sweden’s rental sector is heavily regulated, with first hand contracts negotiated between landlords and the Tenants’ Association, and the rent that can be charged for second-hand contracts limited to only a small fraction above what the first-hand renter pays. 

“You’re not allowed to make any profit subletting an apartment in Sweden,” Sjölin explains. “You can only charge the subletting tenant the same rent as you [the first-hand tenant] are paying to your landlord, and then you can add the costs for internet and electricity, and perhaps a parking lot, if that is included.” 

Tenants’ Association lawyer Roland Sjölin. Photo: supplied.

You can also add a påslag or “markup”, if you are renting out the apartment fully furnished, but this cannot exceed more than 15 percent of the rent. 

That doesn’t mean that most landlords follow the law. The competition for rental apartments, especially in Stockholm, is so intense, that unscrupulous sublet landlords often try to get away with charging well over the legal amount, charging what is known in Sweden as ockerhyra, or “excess rent” and hoping that their tenants are too desperate to complain.  

What many foreigners do not realise is that even after the rental period is over, they can still get back any excess rent they have paid by applying to the Rental Board or Hyresnämnden, which functions like a court judging rental disputes. 

“If you have the evidence then it’s fairly easy,” Sjölin said. “I get a new case every second week on repayment of unfair rent, and I think that I win most of them.” 

“Nowadays, you can get paid back excess rent up to 24 months back in time, so people tend to get more money,” he added. “In some cases, they can get 200,000 kronor. In other cases, perhaps it’s only 30,000 kronor or 60,000 kronor. It depends on how long you have rented the apartment, and how excessive the rent you’ve been paying has been.”

The first step is to establish what would have been a fair rent, either by asking your landlord what they themselves pay directly or by checking with the Tenants’ Association.

“Because we negotiate most rents in Sweden, we normally know what the firsthand rent is,” Sjölin explained.

Then you need to collect together your evidence.

“It’s a good thing to have a written contract and also papers from your bank showing that you paid rent every month, and perhaps photographs of the apartment, so the rental board can get an idea of the apartment you were renting and what would be a fair rent, and also the termination for the contract so you can show the court how long you’ve been living in the apartment.” 

But Sjölin underlined that since Sweden has free burden of evidence, none of this is essential. 

“Even if you’ve been paying in cash, if you have witnesses who can testify what you were paying each month, you still have a chance of getting your money back. It’s a bit more tricky, but I’ve won two cases like that this year.” 

People in Sweden, he explained, tend to wait until the rental period is over before seeking to get paid back excess rent rather than challenging their landlord while they are still living in the apartment. 

“You don’t have any legal protection for your home for the first two years, so if you bring the matter up with the person you’re renting the apartment from you risk losing your contract and having to move out, so most people wait until they’re supposed to move anyway,” he said.

If you apply to the rental board for a refund close to the day you move out, you can then make your landlord pay back all excess rent paid in the 24 months leading up to the date you contacted the rental board.

If you are a member of the Tenants’ Association, you can contact them and ask for help with your application, but there are also specialist companies, like Orimlig Hyra AB who will buy your case off you and give you a refund within 48 hours, saving you a long wait in exchange for a cut of the money reclaimed. 

Sjölin said that the rental board normally took about 8 months to come to a judgement, but that if the person with the first hand contract appeals, that could extend the waiting time by between six months and a year.

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