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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.

Tax deferment on purchase and sale of residential properties abroad

The regulations on tax deferment for capital gains from privately owned residential properties encompass the purchase and sales of residential properties within the European Economic Area (EEA). The EEA currently comprises the 28 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, Sweden and the UK) as well as Iceland, Liechtenstein and Norway.

Deduction for deferred tax

The same requirements and conditions that are applicable to the purchase or sale of residential property 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.

Ascribed income on deferred tax amount

Persons who have been granted deferred tax are to pay an annual tax of approximately 0.5 Percent of the deferred tax amount. To do this, you must file ascribed income as investment income in your tax return. Ascribed income is calculated at 1.67 Percent of your remaining deferred tax at the start of the income/calendar year. The tax rate is 30 Percent of the ascribed income. The tax thus corresponds to about 0.5 Percent of the actual deferred tax amount. You are liable for tax on the deferred tax amount even if the replacement residence is located abroad.

Disclosure liability

If you have purchased a residential property in an EEA country other than Sweden and are granted a deferment on capital gains tax, you must submit information to the Swedish Tax Agency annually, indicating that the nature of your ownership remains the same as when you acquired the property. 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 tax deferment to a tax liability.

Sale of replacement residence

If you have been granted tax deferment, but sell a replacement residence abroad or no longer fulfil the requirements on deferred tax, you must revert the deferred tax amount to a taxable amount. You can revert deferred tax using the K2 form. If you wish to report the sale of a replacement residence in Sweden, you must instead reverse the deferment on the form where you report the sale.

Property tax on foreign residential properties

Property taxes on foreign residential properties were discontinued as of 1 January 2008. No Swedish municipal property tax has since been introduced for privately owned residential properties abroad.

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Residential properties abroad

Tax deferment on purchase and sale of residential properties abroad

Deduction for deferred tax

Ascribed income on deferred tax amount

Disclosure liability

Sale of replacement residence

Property tax on foreign residential properties

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Other languages

Residential properties abroad

Tax deferment on purchase and sale of residential properties abroad

Deduction for deferred tax

Ascribed income on deferred tax amount

Disclosure liability

Sale of replacement residence

Property tax on foreign residential properties

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