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PROPERTY

A beginner’s guide to buying an apartment in Sweden

Thinking of buying an apartment in Sweden, but struggling to get to grips with the nuances the locals take for granted? Fear not, our handy guide will put you on the right path.

A beginner's guide to buying an apartment in Sweden
An apartment viewing is known as a 'visning' in Swedish. Photo: Janerik Henriksson/TT

Getting the money

Unless you’re rolling in cash (in which case congratulations, skip to the next point) you’re going to need a mortgage in order to buy an apartment. Compared to other countries Swedish banks seem strict when it comes to who they will loan money to, and to state the obvious, they will want solid proof of steady income and your financial situation before they will cough up the green.

As a rule of thumb if you’re in permanent employment, you’ll find it easier to get a loan than if you’re self-employed, as the latter is considered higher risk. If you are self-employed it’s not impossible, but you’ll need to make an effort to convince the bank with hard evidence that your business is economically sound.

If that permanent employment is in Sweden, even better. A second point to consider is that a good Swedish credit history will go a long way towards helping you get a loan. If you don’t have a history of income within Sweden and are moving from abroad, you will need to provide detailed evidence of your credit history, any loans from abroad you have, and proof of assets. It could even be worth renting initially to build up a domestic credit history and make the buying process easier.

Then there’s the deposit – these days in Sweden, at least 15 percent of the apartment’s cost needs to come from your own pocket. And forget about only paying off the interest on the mortgage. As of June 2016, Swedish law dictates that new loans must be amortized by between one and two percent each year, unless you’re loaning less than 50 percent of the value of the property and the loan isn’t more than 4.5 times your yearly income.

If you fulfil the bank’s requirements, ask them for a lender’s note (lånelöfte) – proof of the amount they’re willing to lend you. Once you have one it’s worth shopping around for the best offer – consult as many lenders as possible and see who can cut you the best deal. Once you’re armed with that proof, you can start bidding on an apartment (some estate agents require one before they’ll allow you to do so).

Photo: Fredrik Sandberg/TT

Getting the apartment

With the bank’s seal of approval in your pocket, start looking at properties. Dive into estate agent websites, or even better, Hemnet, which collates them, for listings of what’s on the market or what’s about to be on it (there’s even a word in Swedish for looking at homes on Hemnet).

Otherwise, it’s time to go to the property for an open house, take your shoes off, and have a look around just like everyone else. Once you’ve decided you want the place, start bidding via the estate agent. The process is usually done by SMS, so make sure you have your phone nearby to react to any counter-offers.

If your offer is the winning one, congratulations – but only tentatively, as even once the contract is signed, you still need to be accepted into the cooperative which owns the building. What’s that, we hear you say?

Photo: Fredrik Sandberg/TT

Think collectively

When you buy an apartment in Sweden, you’re not only buying the right to live in the property itself, but in all likelihood also buying into a collective – known as a bostadsrättsförening. Each month you’ll pay fees that go into the cooperative’s pot, and in turn they use that to pay for utilities like the heating costs in the building, everyday maintenance such as cleaning of shared hallways, and bigger projects like any possible refurbishment of the building.

Different cooperatives have different monthly fees, and how much you pay is largely determined by how much income the cooperative has on one hand, and how high its expenses are on the other.

Aside from the monthly fee paid by tenants, other forms of income common for cooperatives include guest apartments in the building which can be rented out for visiting family members, communal rooms that can be rented for functions, and parking places that can be rented for a cost. The higher those other sources of income are in proportion to the building’s expenses, the lower the amount you pay in your monthly fee.

It’s well worth doing some research on the cooperative you’re buying into before making a bid on an apartment – a cooperative with a more stable economic history and varied sources of income is worth its weight in gold. Sites like hitta.se allow you to search for a cooperative’s yearly financial reports and look at what kind of state it is in – take some time to consider the details.

And before you buy, check if the cooperative has any major building work planned in the near future. Buying a dream apartment only to find out that the bathroom will be out of commission for a month while the building’s ancient drainage system is replaced is not a good feeling.

Being approved by the housing association is the last step in making the apartment yours. In theory you could be rejected, but that’s rare. There may however be some kind of interview process as a formality – meet the neighbours, that sort of thing.

Photo: Tomas Oneborg/SvD/TT

In the long term

One more long-term matter to keep in mind if you’re thinking of buying an apartment in Sweden but aren’t sure if you’ll be staying in the country permanently, is that profit made from the sale of property is subject to capital gains tax – 22 percent of the profit.

That tax can be deferred in full up to a limit of of 1.45 million kronor if you’re using the money to upgrade to a new house in Sweden or within the European Economic Area (EEA), but if it’s elsewhere, you’ll have to pay up. If you’re coming from the US or Australia for example and considering buying an apartment in Sweden before eventually moving back home, that’s worth keeping in mind.

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RESIDENCY PERMITS

FACT CHECK: Can you get a residency permit if you buy property in Sweden?

There have been several reports of foreigners who bought Swedish property after they were falsely made to believe that it would speed up their process towards a Swedish residency permit. But what do the rules actually say?

FACT CHECK: Can you get a residency permit if you buy property in Sweden?

I’ve never been told buying property in Sweden will give me a residence permit. Is this really a thing?

The short answer is a firm no, but despite this there has been a series of incidents of non-EU foreigners who were allegedly tricked into buying property in Sweden before moving, believing that owning property would make them eligible for a Swedish residence permit.

What’s the story? 

These incidents most recently grabbed headlines in June 2024, when public broadcaster SVT reported that a number of properties in Sweden had been sold to buyers in the Middle East well over market price, after the buyers were led to believe it would help them gain residence permits. The properties are all linked to businessman Kadry El Naggar, who runs the company Sweden for Investment.

As far back as 2013, SVT reported that another company owned by El Naggar, Swedish Connections, at the time told buyers in Egypt that buying property in Sweden would help speed up the process of getting a residence permit or even Swedish citizenship.

El Naggar has never been convicted of any crimes, but he has been sued by two previous buyers. In one of the cases, the purchase was cancelled, and the other buyer won their court case. He denied to SVT that his company offers its services under false pretence.

“I buy old houses and sell them on. I don’t sell permanent residency permits. That’s clear if you look at our sites,” he told SVT.

A note on his website reads “we do not issue visas or guarantee any residence permits as these are determined individually by the Swedish Migration Board”. But SVT reports that in several social media posts, El Naggar falsely claims that all foreigners need to get a Swedish residency permit is a bank statement showing a balance of at least 20,000 dollars (210,660 kronor), as well as a company and property.

How many properties have they sold?

According to SVT, there are 50 properties up and down the country linked to El Naggar, his wife or their company, with 32 of those in Norrland. Thirty-six properties currently have one or more foreign owners, with a total of 53 owners registered as living outside of Sweden.

The broadcaster also linked 37 different Sweden-registered companies to these owners, who are registered as living in a number of different countries, including Egypt, Saudi Arabia, Kuwait and Palestine.

Many of the properties are in relatively bad condition, sold via executive auction through the Swedish Enforcement Authority (Kronofogden).

One pharmacist from Egypt told SVT he had paid 188,000 kronor for a home in the village of Undrom outside Sollefteå in northern Sweden, with the dream of giving his children a better life, after Facebook adverts promised that he could get residency through buying a property.

He hasn’t even been able to visit his house in Undrom due to the cost of travelling to Sweden from Saudi Arabia, where he lives. 

He told SVT he had been warned by someone else who had been in a similar situation just before he was due to make the final payment on the home, and he then demanded to cancel the purchase, but the company refused. He has now hired lawyers in Egypt and Sweden.

“We’ve seen that this method has been ongoing for a while,” Migration Agency official Anette Bäcklund told SVT.

“And all of those people who have applied for a residence permit from us have had their applications denied. You need to follow certain rules to qualify for a residence permit, and that hasn’t been the case in these cases.”

How do I move to Sweden as an entrepreneur or investor?

It is possible to get a temporary residence permit as a self-employed person in Sweden, and permit holders who can support themselves and their families are eligible for permanent residency after just two years, but this requires more than just having a high enough bank balance, registering a company in Sweden and owning a property.

According to the Migration Agency, self-employed people must meet the following requirements in order to be granted a two-year residence permit:

  • hold a valid passport
  • show you have good experience of your industry and previous experience of running your own company
  • show you have relevant knowledge of Swedish or English. For example, if you have contact with a number of suppliers or customers in Sweden, you need to be able to speak Swedish to a very high level
  • prove that you are in charge of running the company and that you have decisive influence for it
  • prove that you have enough money to support yourself and any family accompanying you (200,000 kronor for you, 100,000 kronor for an accompanying partner or spouse and 50,000 kronor for each accompanying child)
  • show a credible foundation for your budget
  • show that you have built a network of customers or other business network
  • pay a fee in most cases (equal to the fee for a work permit)

The Migration Agency will then assess your business plans to determine whether or not you should be granted a permit. There is no requirement for applicants to own a property in Sweden.

If you are granted a two-year permit and want to apply for permanent residency once it runs out, there are further requirements. You will need to prove that you are still running the company, are complying with good accounting practices and have all the necessary permits for the business, among other things, at the time you renew your permit. 

Permanent residency applicants need to prove that they and their family have been living in “reasonable” housing conditions, but there is no stipulation that they must own this home.

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