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Residential properties abroad
On selling a residential property abroad, in some cases, you may be subject to taxation for capital gains in Sweden. Whether you will be taxed depends partly on whether you are subject to limited or unlimited taxation in Sweden, and partly on the provisions of any existing tax treaties between Sweden and the country in which you sold the residential property.
Deferment on capital gain if you purchase or sale residential properties abroad
The regulations on deferred capital gain from privately owned residential properties encompass the purchase and sales of residential properties within the European Economic Area (EEA). The EEA currently comprises the 27 EU nations (Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden) as well as Iceland, Liechtenstein and Norway.
You can not get a deferred capital gain on purchase or sale of residential properties in the UK after year 2020.
Deduction for deferred capital gain
The same requirements and conditions that are applicable to the purchase or sale of residential property in Sweden must be fulfilled when purchasing or selling a residential property abroad.
A flat is either under your direct ownership (e.g. owner-occupied flat) or indirect ownership (e.g. tenant-owner property). For a flat with indirect ownership to qualify as an original or replacement residence, the foreign housing corporation must be a legal entity that corresponds to a Swedish limited liability company or cooperative association, and must otherwise fulfil the requirements for qualification as a privately owned company.
If you are requesting deferment upon purchasing or selling a residential property in an EEA country other than Sweden, you should attach the following to your request: purchase agreement, any title deed registrations and documentation of residence.
Annual tax on deferred capital gain
Persons who have been granted deferred taxation on capital gain are to pay an annual tax of approximately 0.5 Percent of the deferred amount. You are liable to pay annual tax on the deferred amount even if the replacement residence is located abroad. The annual tax has ceased from income-/calendar year 2021. This concerns both old and new deferred capital gain. You will no longer pay annual tax from the tax return 2022.
Disclosure liability
If you have purchased a residential property in an EEA country other than Sweden and are granted a deferment on capital gain, you must submit information to the Swedish Tax Agency annually, to show if you still own the property or if the ownership has changed. You can do this by crossing the yes or no box in section J of the K2 form. If you fail to submit any information, the Swedish Tax Agency may revert the deferment to a tax liability.
Sale of replacement residence
If you have been granted deferment, but sell the replacement residence abroad or no longer fulfil the requirements on deferred capital gain, you must revert the deferred amount to a taxable amount. You can revert the deferred amount by using the K2 form. If you need to report the sale of the replacement residence in Sweden, you must instead revert the deferred amount on the form where you report the sale.
Property tax on foreign residential properties
You do not pay Swedish national or municipal property tax on privately owned residential properties abroad.
Download forms
- K2 – Deferred capital gain – residential property (SKV 2102)
- K5 – Sale – Single family dwelling and owner-occupied flat (SKV 2105)
- K6 – Sale – Tenant-owner property (SKV 2106)
- K7 – Sale – Non-residential property (SKV 2107)
- K8 – Sale – Non-residential tenant-owner property (SKV 2108)
- K9 – Sale – Unreal tenant-owner property (2119)
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