How foreigners can purchase real estate in Sweden: rights, obligations, and tips

Rights of foreign buyers to real estate in Sweden

Foreign citizens can freely acquire real estate in Sweden, regardless of their nationality, by registering the transaction under an individual or legal entity. However, there are certain restrictions: for example, the purchase of agricultural land and plots located in protected natural areas is prohibited. At the same time, for other types of real estate, such as residential and commercial buildings, there is a wide selection available, including plots intended for construction.

Forms of property ownership

In Sweden, there are various forms of property ownership, each with its own nuances.

• Private property:It usually concerns individual houses and townhouses with adjacent plots. Owners of such properties are fully responsible for their assets. In 2009, a law was passed in the country regarding the right to private ownership of apartments in multi-story buildings, although there are still not many such properties on the market.
• Cooperative ownership:In general, this is how residential complexes are organized in Sweden. When you purchase a share in a cooperative, you gain the right to use and maintain the housing, although all common areas remain in joint ownership. It is important to note that decisions regarding the management of common property are made at general meetings.

Additionally, there may be restrictions in the bylaws that could block the ability to rent out the apartment. Therefore, it is strongly recommended to review the living rules and financial documents of the cooperative before finalizing the deal.

Responsibilities of foreign buyers

In addition, foreignreal estate buyers in Sweden, regardless of their citizenship and tax status, must also fulfill obligations related to property maintenance and the payment of annual taxes when they take on property rights. If you plan to rent out your property, you will need to pay income tax on the rental income to the local budget.

Specifics for citizens of Russia

For Russian citizens who are tax residents, there is also an additional obligation to notify the Russian tax authorities about the existence of foreign bank accounts or the establishment of foreign legal entities. This can be important in the process of transactions. Russian citizens are advised to study the rules for acquiring foreign real estate for more detailed information.

Immigration and real estate ownership

However, it should be noted that owning property in Sweden does not automatically grant rights to residency or citizenship. If your goal is related to immigration, purchasing an apartment, regardless of its cost, will not help with this.

Conclusion

Therefore, before making a decision to purchase real estate in Sweden, it is important to thoroughly analyze all aspects, including legal and tax obligations, as well as the specifics of different forms of ownership. This will help avoid potential difficulties and make the buying process clearer and more transparent.

Introduction

According to information from the migration service, migrants from the former Soviet republics most often obtain residence permits in Sweden based on family reunification or employment. Another common solution is starting their own business in Swedish territory.

Real estate market analysis

When choosing real estate in Sweden, it is important to conduct a market analysis in advance. Before making a purchase, it is advisable to carefully study the available options, their prices, and conditions. A great starting point for your search can be the Swedish resource hemnet.se. This portal provides comprehensive information about the current state of the housing market, which will be especially useful for investors. The site also features reviews and ratings of various agencies, developers, and realtors.

The role of realtors in transactions

Speaking of realtors, it is worth noting that all professionals in this field in Sweden are required to have a higher education and be registered with the local inspection that oversees the activities of real estate agents. There is no need to involve lawyers to finalize transactions, as the realtor takes on all legal aspects related to the documentation. Typically, the seller chooses the appropriate agency and pays the realtor a commission.

• In most cases, the agent has exclusive rights to sell the property, which is documented in an agreement with the owner.
• It's quite rare to come across multiple offers for the same apartment from different realtors.

Responsibilities of a real estate agent

According to the current legislation in Sweden, a real estate agent is required to act in the interests of both parties in a transaction, which relieves the buyer of the burden of paying for additional intermediary services. Their responsibilities include handling property rights and facilitating communication between the buyer and the seller.

At the same time, the realtor must ensure that the buyer has received all the necessary information about the property.

Additional services for international clients

Some agencies that work with international clients offer attractive services, including organizing special tours for potential buyers. During these tours, potential clients are met at the airport, accommodated in hotels, shown local attractions, and taken on tours of real estate properties.

Therefore, it is very important to familiarize yourself with the list of services offered by a specific agency in advance before making a decision to collaborate.

Trends in the housing market

In the last six years, the housing market in Sweden has grown significantly, increasing by 38%, and foreigners are actively buying vacation homes here. To stay updated on the latest news about overseas real estate, it's helpful to subscribe to updates in a Telegram channel where fresh materials are published.

Preparation for purchasing real estate

Before starting the process of closing a real estate deal, it is crucial to clearly define the desired location and thoroughly review the available options. It is advisable to calculate in advance the budget you are willing to allocate for the purchase, taking into account all associated costs.

It is also worth analyzing the possibility of obtaining financing from Swedish banks, although in practice, loans are most often granted only to those who have verified income in Sweden.

Introduction

If you plan to engage in entrepreneurship in this country, you will definitely need to provide documents confirming your financial achievements over the past few years.

The first stage is participation in the auction.

When you decide on a property and find an agent, the time comes for you to participate in an auction. In Sweden, there is a sharp imbalance between supply and demand, which is why apartments are sold at auction, also known as bidding.

• Auctions are divided into closed and open ones.
• At closed auctions, participants make their bids and wait for the results.
• In open auctions, participants can see competitive bids and raise them.

At the auction, the starting price can increase by 20-30%. Participation in the bidding takes place over the phone with the help of a broker. Sellers communicate with potential clients only at the contract signing stage. There are risks that the seller may refuse the deal if the offered price does not meet their expectations.

The second stage is signing the contract.

Immediately after the auction trading concludes, two types of agreements are drawn up:

• A contract with the seller that outlines the terms of the deal and the price.
• Contract with a realtor for the provision of their services.

In order for the document to have legal force, the presence of at least two witnesses is required. At this stage, a deposit of 10% of the agreed amount is also made. It is important to specify the conditions under which it is possible to withdraw from the deal. Generally, the process of formalizing the contract is quite quick, taking just a few days.

In situations where a buyer is unable to visit Sweden, many professional agencies offer services for preparing a power of attorney. Such a document can be prepared in one's home country and translated into Swedish. After that, it will be sent to the representative via postal services.

Tax liabilities and additional expenses

When purchasing real estate, it is important to consider various tax obligations and additional expenses that may arise at that time.

• Stamp duty:All real estate transactions, including land and buildings, are subject to this tax. The responsibility for its payment lies with the buyer. The amount of the stamp duty is calculated based on the higher value—either the market value or the assessed value, depending on which one is greater. For individuals, the tax rate is 1.50%, while for legal entities, it is 4.25%.
• Administrative fee:The buyer will also have to pay an administrative fee related to changes in the state land registry and obtaining a certificate of ownership. This fee may amount to approximately 80 euros.
• Realtor services:This is another possible expense, although it is not always mandatory for buyers. Typically, the agent's commission ranges from 3% to 5% of the property price, and this amount is paid by the seller.
• Annual expenses:After the deal is completed, the owners will have to pay property tax, utility bills, insurance, and maintenance of the common areas of the apartment complex.
• The absence of a wealth tax:There is no wealth tax in Sweden.

If you're interested in details about property management and maintenance in Sweden, you can check out our other articles on this topic.

Features of the Swedish real estate market

Now let's take a closer look at the features of the Swedish real estate market. This country is considered one of the most expensive in Europe in terms of housing prices. Due to a shortage of affordable housing, property prices in Sweden are steadily rising. Over the past six years, apartment prices have increased by 38%, and over the last 20 years, by 155%.

• The average price per square meter in Stockholm in 2020 ranged from 7,000 to 10,000 euros.
• In Gothenburg, the average price ranged from 5 to 6 thousand euros.
• In Malmö, prices ranged from 3,000 to 4,000 euros.
• In small towns, real estate prices are significantly lower.

Attractiveness for foreign investors

The Swedish real estate market is known for its stability, making it attractive to foreigners. Many foreign citizens are eager to purchase summer houses and country cottages for recreation. According to data from the national statistics agency, as of 2019, foreigners own 37,740 resort properties in Sweden, which accounts for 6.2% of the total volume of such housing. Among these owners, 87% are citizens of Norway, Denmark, and Germany.

Life in cooperative apartments

It is also important to consider some peculiarities of living in cooperative apartments in Sweden. There are specific rules in place that may seem unusual to people from other countries. For example, in such buildings, it may be prohibited to install individual washing machines; instead, there are communal laundry facilities that are used according to a schedule.

Conclusion

At this stage, I want to summarize our conversation about the real estate market in Sweden and the rights and obligations of foreign buyers. We discussed that any citizen of the world has the opportunity to purchase property in Sweden, with some exceptions regarding agricultural land and areas in protected natural zones. The selection here is indeed extensive: from residential properties to commercial spaces and plots of land for development.

It is important to note that the ownership structure in Sweden can vary. Whileprivate propertyallows owners to have complete control over their home and land.cooperative housingIt may impose certain obligations and restrictions on usage that should be considered before starting the purchasing process. I strongly recommend that anyone intending to become a property owner in this beautiful country familiarize themselves with all the terms and regulations, as they can significantly affect the comfort of living and future actions.

Moreover, one should not forget abouttax obligationsThe purchase of real estate is also accompanied by various obligations. All foreign buyers are required to pay property taxes, which in turn necessitates careful budget planning. It is important to understand that owning property in Sweden does not automatically grant residency rights or citizenship, and if your goal is immigration, it is worth exploring other avenues to achieve that goal.

Recommendations for buying real estate

To ensure that the purchasing process goes as smoothly as possible, I recommend:

• Thoroughly research the real estate market.
• Study the initial stages of the deal.
• Choosing the services of professional realtors.

As mentioned, the services of professional realtors can be extremely helpful, as they possess quality expert information and the necessary experience in this field. Choosing a reliable agency that works with foreign clients can significantly simplify the task and save time.

Result

So, purchasing real estate in Sweden is not just about anticipating new horizons, but also a serious step with many nuances. I hope this article has helped you better understand this process and made it more accessible. The current market situation, the professionalism of Swedish realtors, and the extensive opportunities for foreigners create favorable conditions for a successful purchase. Good luck on this exciting journey!