If you choose to rent out your property, there may be situations where you need to pay taxes on the rental income. In this article, we help you clarify any uncertainties. You can also use the Swedish Tax Agency's calculation tool.
- Standard deduction of SEK 40,000
- Other possible deductions
- What counts as rental income?
- Which tax rate applies?
- When should the declaration be made?
- How do you declare?
Standard deduction of SEK 40,000 (SEK 50,000 from 2024)
Since 2013, you are entitled to a standard deduction of SEK 40,000. This implies that if you rent out for more than SEK 40,000 in total during the year, you will only need to pay taxes on the rental income exceeding that amount (for rental income that began in 2024, the standard deduction will increase to 50,000 SEK). However, if you rent out for less than SEK 40,000, your rental income will be completely tax-free! Here are some things to keep in mind:
The standard deduction applies per year and per property
If you rent out several properties, you are entitled to multiple deductions. Therefore, you can rent out both your holiday home and your condominium in the same year and receive full tax deductions for both properties. The same applies, for example, if you rent out two single-family houses on the same private residential property.
You can only make the deduction for the number of months you owned or rented the property. For example, if you buy a property on April 1, you can make the deduction for 9 months:
SEK 40,000 x 9 months ÷ 12 months = SEK 30,000
The deduction right is based on ownership
The deduction right is based on the actual ownership share. This means that if you share ownership of a property with someone else, you can only deduct a portion of the standard amount on your income tax return. For example, if you co-own a property with your partner at 50%, you both get half of the standard deduction (i.e., SEK 20,000 each). This also means that if you jointly own a property with someone else and each use it for X number of weeks, you can only utilize X percent of the standard deduction if you choose to rent out your weeks. Owners cannot freely allocate the deduction between each other.
Exception for renting out many properties
If you own and rent out more than three properties, the rental may be classified as income from business operations. Different tax rules apply in that case.
Exception for renting out to your own company
Different rules apply when renting out to your own or a relative's employer or your own company.
Other possible deductions
Deduction for villas or "ägarlägenheter"
In addition to the standard deduction of 40 000 SEK, you can make a deduction of 20% of the rental income. This deduction is intended to cover your operating expenses, such as waste collection, water, and electricity.
Deduction for condominiums ("bostadsrätt")
You can deduct the fee you pay to your association. The deduction depends on the size of the area you are renting out and the duration of the rental. If you rent out part of your condominium, you can only deduct an amount proportional to the area your tenant exclusively uses, which is considered the rented part. Common areas that you and your tenant use together, such as the bathroom, are not considered the rented part.
Example: If you rent out a room of 12 sqm in a condominium of 48 sqm, and you pay SEK 4,000 as a fee to the condominium association, you have the right to make a deduction of:
12/48 x SEK 4,000 = SEK 1,000
In addition to the regular fee from the condominium association, they have the right to charge a fee from the person who rents out their condominium to cover the extra costs incurred by the association due to the subletting. You can also deduct this fee.
Deduction for rented apartments ("hyresrätt")
You can deduct the rent that you pay to the landlord. The deduction depends on the size of the area you are renting out and the duration of the rental. If you rent out part of your rental apartment, you can only deduct an amount proportional to the area your tenant exclusively uses, which is considered the rented part. Common areas that you and your tenant use together, such as the bathroom, are not considered the rented part.
Example: If you rent out a room of 12 sqm in a rental apartment of 48 sqm, and you pay SEK 8,000 in rent, you have the right to make a deduction of:
12/48 x SEK 8,000 = SEK 2,000
What counts as rental income?
If your tenant pays you a flat amount, such as for electricity, it counts as rental income if you include it in the rent specified in the rental agreement. However, if your tenant pays the actual cost for electricity and internet, for example, you should not count it as rental income.
Which tax rate applies?
The amount that remains after all deductions will be taxed as capital income at a tax rate of 30% in your income tax return. If the deductions exceed your rental income, the rental is completely tax-free.
Example 1: Renting out a condominium
Let's say you rent out your condominium for the entire year. It is worth SEK 2.5 million and has a monthly fee of SEK 3,000. According to the current rules, reasonable rent for the condominium is SEK 11,333 per month (see the rental pricing guide). The tax calculation would be as follows:
|Rental income (hyresrätt or bostadsrätt)
|– 40 000
|Deduction for fees
|– 36 000
|– 17 999
|Rental income after tax
Example 2: Renting out a villa
If you instead rent out your villa, the tax rules are slightly different. Let's say the property is worth SEK 3.5 million and has operating costs of SEK 4,000 per month. The maximum rent you can charge would be SEK 15,666 per month. The tax calculation would then be as follows:
|Rental income (villa)
|– 40 000
|Deduction for 20% of the rent
|– 37 599
|– 33 118
|Rental income after tax
DAC-7: EU:S new legislation for reporting income from digital platforms
As of January 1, 2023, operators of digital platforms must collect information about sellers on platforms and the payments they receive. This information must be reported to the Swedish Tax Agency. The same rules as before apply for how you should declare and pay taxes.
When should the declaration be made?
You should report your rental income - if it exceeds the deductions - in the income tax return for the following year (so if you had rental income in 2023, you will declare it in the 2024 income tax return). It's a good idea to make a preliminary calculation of the tax from the beginning so that you don't have to make an extra tax payment.
It can also be beneficial to keep documents such as rental agreements and payment receipts for fees to the housing association and other important records. This way, you will have the necessary information for calculating your rental income and deductions in case the Swedish Tax Agency has any inquiries. If you rent out through our service, we will naturally save all that information for you.
How do you declare?
You declare your rental income in your regular income tax return. The easiest way to do this is through the Swedish Tax Agency's e-service. You can also use the form SKV 2199 to calculate the surplus from the rental. Although you don't need to submit this form to the Swedish Tax Agency, it's advisable to keep it in case they have any questions about your rental income.
Swedish Tax Agency's calculation tool
The Swedish Tax Agency's calculation tool can be of great help in easily determining if, and if so, how much tax you should pay.