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This is how much it costs to rent an apartment in Sweden

The cost of renting a sublet apartment has soared in the past year, according to fresh statistics.

This is how much it costs to rent an apartment in Sweden
Sweden's rental market can be tricky to navigate for foreigners. Photo: Christine Olsson/TT

In the third quarter of 2016, the average price of Stockholm apartments advertised on rental site Blocket jumped by 7.4 percent compared to the same period last year.

A one-room apartment in the capital today costs on average 7,700 kronor ($874) a month to sublet and a two-room apartment 12,500 kronor, according to statistics compiled by tenants' magazine Hem&Hyra.

In Gothenburg, second-hand leases for apartments are available for on average 7,295 kronor, a 13.3 percent rise on 2015. A sublet in Malmö is 7,069 kronor, up by 9.3 percent.

In Jönköping, about 300 kilometres south-west of Stockholm, the monthly rental price for a sublet is 6,198 kronor. But the town saw the biggest rise of all the cities Hem&Hyra examined in the report, with the average price up by 15.8 percent in July-September compared to the same period last year.

Let The Local help you find an apartment in Sweden.

Check out our property rental section

Why have prices gone up by so much?

Well, in theory, the Swedish rental market is tightly controlled, with companies banned from charging tenants above a certain level in a move designed to stop young people and low earners being driven away from urban centres.

However, few homes covered by these rules have been built in the past years and there simply aren't enough apartments with rent caps to go around, which pushes up the price of second-hand leases.

In theory, landlords should not charge tenants more than 15 percent extra compared with their own rent, but in practice many tenants fear that insisting on their rights will cost them their elusive contract.

Simon Safari, the chairman of the Swedish Union of Tenants, told The Local last year that it is not uncommon for foreigners to end up paying double the appropriate price for apartments, especially in the Swedish capital.

“Foreigners are most at risk because they don't always know the rules and the people advertising their homes are aware of this,” he told The Local.

GUIDE: How to navigate Sweden's crazy rental market

One to five-room apartments advertised on Blocket in July-September 2016

Stockholm: 10,494 kronor (7.4 percent)
Gothenburg: 7,295 kronor (13.3 percent)
Malmö: 7,069 kronor (9.3 percent)
Uppsala: 6,943 kronor (8.3 percent)
Helsingborg: 6,782 kronor (-3.6 percent)

Read the full list here.

Let The Local help you find an apartment in Sweden.

Check out our property rental section

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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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