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PROPERTY

Swedish summer homes a hit with foreigners

The number of foreigners who own summer houses in Sweden has doubled since 2000, with Danes, Germans and Norwegians taking the lead in purchasing a Swedish smultronställe for their families.

Swedish summer homes a hit with foreigners

In 2012, more than 36,000 of Sweden’s vast stock of summer cottages had gone into foreign ownership. Almost 12,000 Danes have bought a second home across the Östersund strait.

Germans and Norwegians are the second and third most common foreign owners of holiday homes in Sweden, with about 10,000 nationals of each country opting to purchase a Swedish countryside cottage.

Only 12.1 percent of the remaining foreign owners of holiday homes were from other countries, according to figures released on Monday by Statistics Sweden (Statistiska centralbyrån – SCB).

In the Swedish counties of Skåne, Kronoberg, and Värmland, foreigners now own almost half of the summer houses. Skåne is across the sea from Denmark, while Värmland borders Norway. In the municipality of Markaryd, foreigners now own 59 percent of holiday homes (fritidshus) in the area.

It was long very common for Swedes to own a second home (fritidshus or sommarstuga) where they spent large parts of their summer holidays, with many employees taking out leave in July. As Sweden has climbed upwards in the income tables, however, many citizens have opted out of spending chunks of holiday time at their domestic smultronställe (“wild strawberry spot” – a Swedish expression for a place special to your heart).

SEE ALSO: Check out the latest home listings in The Local’s Property Section

Statistics Sweden said that the number of foreign summer house owners had increased by 99 percent since the turn of the century, with purchases from Norwegians and Danes increasing the most.

“One reason could be increased transport links with two bridges,” Statistics Sweden noted in a statement.

“The Öresundsbron bridge to Denmark opened in the year 2000 while the Svinesundsbron bridge between Norway and Sweden was inaugurated five years later.”

SEE ALSO: Get the latest exchange rates and transfer money on The Local’s Currency page

The number of Norwegians spending part of their holidays in Swedish cottages had gone up by 292 percent since the year 2000; the Danish summer residents increased by 164 percent.

The spread of summer-house ownership also showed certain preferences for the different groups.

“The further north you get, the fewer foreign-owned summer houses,” noted Statistics Sweden.

“The Norwegians mostly go for counties bordering Norway, such as Västra Götaland and Värmland, but they have started to find their way to Jämtland.”

TT/The Local/at

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MONEY

How you can lower the monthly cost of your Swedish mortgage

It’s no secret that mortgages in Sweden have become more expensive over the last year or so, as interest rates have risen following high inflation. But did you know there’s a way you can lower your monthly mortgage cost?

How you can lower the monthly cost of your Swedish mortgage

Essentially, when you take out a loan in Sweden, the government gives you a discount on the interest you pay, in the form of a tax rebate.

This doesn’t include interest paid on all types of loans – for example, student loans are not included – but it does include your mortgage.

In order to qualify for the discount, referred to as ränteavdrag (interest deduction) or skatteavdrag (tax deduction), you need to fulfil some requirements: 

  • You’ve paid income tax and at least 1,000 kronor in interest in the last taxation year
  • You have a capital deficit (meaning that your interest costs must be greater than any capital income you’ve earned through interest or dividends)
  • You are either partly or wholly responsible for the loan or mortgage in question

If there are two of you who are both named on the mortgage who fulfil these requirements, you’ll each receive 50 percent of the total tax rebate.

The interest deduction is automatically subtracted from your yearly tax and listed in your yearly declaration, if you fulfil the requirements, meaning you’re likely to get it back as a lump sum when tax season rolls around in April.

How much do I get?

The actual sum you get back varies depending on how much tax and interest you’ve paid during the year, but there are some general calculations which can give you a guideline of what you might get.

You’ll get 30 percent of your interest costs back on the first 100,000 kronor you pay in interest over a year, and 21 percent on anything over 100,000 kronor. 

If there are two of you, you each have your own individual tax deduction, even if you’re paying the same loan, so as a pair you’ll get back 30 percent on the first 200,000 kronor, as well as 21 percent on anything over this figure.

To figure out how much you’ll get, you need to first find out how much interest you’ve paid during the year your declaration covers and subtract this figure from your capital income earned through interest or dividends.

If your figure is negative, that means you can subtract this figure from your tax paid during the year. Bear in mind that if you owe tax, then your interest deduction amount will be used to pay it back first, lowering the total amount you receive.

You can also change the proportion of the deduction applied to each partner if you share a mortgage, dividing it 60/40 or 70/30, for example, if you don’t share the mortgage 50/50. You can do this through your bank or by manually changing the figures in your tax declaration.

I don’t understand. How does this make my monthly mortgage payments cheaper?

Here’s where something called skattejämkning comes in. This literally translates as “tax equalisation”, and it’s a way you can spread your tax rebate for interest costs out over a year, lowering your mortgage costs each month rather than of getting a lump sum in the form of a tax rebate during tax declaration season.

In order to equalise your tax, you’ll need to contact the Tax Agency directly, filling out a form with the catchy title of SKV 4302 – Jämkning (ändring av preliminär A-skatt) or using their Jämkning online service.

To do this, you’ll need to have in-depth figures on things like your salary, pension payments, sick pay and any other income like unemployment benefit or maternity or paternity payments, as well as capital income and any business income for the tax year you’re applying for, as well as your expected income for the rest of the year.

If your application is accepted, the Tax Agency will tell your employer to subtract less tax from your payslip each month, effectively meaning that you get your tax rebate for interest costs back in your monthly pay instead of getting it paid out all at once.

Bear in mind that if you do go down this route it’s important that your calculations are correct. If you accidentally overestimate your interest payments or underestimate your tax owed, you could end up being hit with a hefty tax bill once your declaration comes through.

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