• Sweden's news in English

The Lowdown: Sweden's new subletting law

31 Jan 2013, 16:14

Published: 31 Jan 2013 16:14 GMT+01:00

Starting February 1st, 2013, changes to Sweden's laws governing the subletting of apartments and houses go into effect.

The political debate in the run up to the changes has been heated, and since the laws were approved by the Riksdag in December, speculation has been rampant about what the effects of the changes will be. Some claimed rents for sublets could more than double in some areas.

In order to better understand the changes, The Local caught up with Linn Matic, director of housing policy at HSB, one of Sweden's largest cooperative housing associations, with nearly 450,000 member residents across the country.

What are the key changes to Sweden's subletting laws?

One key change concerns the rent that a property owner can charge a subletting tenant. Under the old rules, the rent that could legally be charged was based on the average rent charged for similar rental apartments (hyresrätter) nearby owned by public or private housing companies. Those rents are set centrally through negotiations between rental-property owners and the Swedish Union of Tenants (Hyresgästföreningen).

But starting February 1st, flat owners can charge rents based on the costs of ownership.

What exactly counts as "cost of ownership"?

According to the new rules, rent charges can cover operating costs and capital costs. Operating costs can include monthly fees paid to the cooperative housing association (bostadsrättsförening), utilities, as well as a premium for wear and tear.

While the law doesn't mention mortgages specifically, property owners are allowed to charge for the "cost of capital", which is at this time considered to be around 4 percent of the market value of the home.

How is market value determined?

If the home was recently purchased, the price paid by the owner can be used as the market value. Alternatively, one can look around at the prices of similar apartments in the neighbourhood and derive market value that way.

What are some more important changes?

The new law also changes how a property owner or the tenant can break the rental contract. Previously, property owners weren't allowed to break the contract, while tenants were required to give three months' notice.

After February 1st, tenants only have to give at least one months' notice if they want to move out of a sublet flat, while property owners who want a tenant to leave must give three months' notice.

SEE ALSO: Photo Gallery - Sweden's 'priciest' house for sale

Also, tenants can't assume that rental contracts are extended automatically and must move out at the end of the contract even if they haven't received any formal notice from the landlord.

So, tenants should make sure to check with property owners at least three months before their current lease is due to expire to avoid any misunderstandings.

What are my options if I think my rent is too high?

Now, as before, tenants who think they are paying too much can file a complaint with the Rental Tribunal (Hyresnämnden).

Previously, if the tribunal ruled in the tenant's favour, the landlord had to lower the rent and pay back up to one year's worth of the amount they had been overcharging. So, if a tenant had been paying 10,000 kronor and the tribunal found that the rent should have been 7,000 kronor, the landlord had to lower the rent to 7,000 kronor and pay back 36,000 kronor in surcharges.

SEE ALSO: Find your next home with The Local’s Rentals Section

After February 1st, however, landlords are no longer obliged to repay the overcharged rent, they simply have to reduce the rent to the level stipulated by the tribunal.

Do the changes affect existing rental contracts? And do they apply to both apartments and houses?

The new subletting laws apply to both houses and apartments, but only come into effect for contracts signed on February 1st and beyond. They also only apply to properties which are owned, rather than rental properites.

The subletting of rental properties (hyresrätter) is covered by Sweden's rental law (hyreslagen).

SEE ALSO: Photo gallery - Sweden's 'smallest' apartment in Lund

Thus, anyone currently subletting needn't worry that the conditions of their lease will suddenly change on February 1st. However, they should review their contract and see when it expires so they are prepared for changes that might take place upon renewal.

What other things should property owners interested in renting out their homes bear in mind with the new law?

Probably the most important thing to remember is that people must still get permission from their local housing association (bostadsrättsförening) before they can sublet an apartment. The government originally wanted to get rid of that condition as well, but it didn't end up as part of the final bill.

SEE ALSO: Check out the latest home listings in The Local’s Property Section

Story continues below…

There are also some new tax deductions associated with renting out one's home. Previously, property owners could deduct 21,000 kronor from the income earned from subletting, but the new law increases that deduction to 40,000 kronor annually. Any income earned above that amount is taxed at a 30-percent tax rate.

So, the big question: how will these changes affect the rents prospective tenants can expect to pay when subletting an apartment in Sweden?

The effects will vary depending on the current difference between rents charged for rental-only apartments and the market value plus operating costs of apartments in the area. In Stockholm and the other big cities, I think it's safe to say that rents will likely go up because the market values are so high.

It will certainly be easier for property owners in Stockholm to justify charging higher rents.

Will the changes encourage more people to sublet and result in more subletting options, as the government hopes?

I think people overestimate the number of vacant apartments available for rent. In Sweden, most people live in their apartments, whereas it's more common in the United States, for example, for people to own a second investment property they own simply to rent to someone else.

It's also important to remember that the changes to the subletting laws only apply to one property. If someone wants to rent out more properties, those apartments must be sublet according to Sweden's rental law.

If anything, I think the new law may mean that people who plan to move in together may wait before selling one of their apartments and instead decide rent it out.

David Landes

Follow David Landes on Twitter

Related links:

Your comments about this article

17:24 February 5, 2013 by henry2
This subletting only put citizens into problems, and abuse. Many will try to make money be using this system, thus asking for rentals too high then any one can afford.Once the signature is placed there will be few regulations to later ask .If any person in in urgent need of a home, he/she will accept any condition, this will give way to abuse. I suggest that contracts will be signed after say a week or more, so tenents has time to look around.
16:35 February 6, 2013 by matressmonkey
This is a great step in the right direction. There is a massive shortage of housing in Stockholm and this will make it attractive for people to rent out their places. The existing system has failed!! That's why there are fifteen year waiting periods!! This new law won't fix everything, but its a beginning.
Today's headlines
Refugees beg to leave 'inhuman' Malmö shelter
Buses arrive at Malmömässan to deliver refugees. Photo: Drago Prvulovic/TT

Refugees beg to leave 'inhuman' Malmö shelter

2 hours ago

Refugees sheltering in Malmö's 2013 Eurovision venue are begging to leave, with one describing it as a "prison" with "inhuman conditions", while Swedish nurses working there have been pulled out because of the health risks.

Swedish DJ salutes high jumper in inspiring vid
Dick Fosby performing the flop. Photo: Screen Grab/Youtube

Swedish DJ salutes high jumper in inspiring vid

3 hours ago

The video for Swedish DJ Avicii's ‘Broken Arrows’ single tells the story of 1960s high jumper Dick Fosbury, whose “Fosbury Flop” technique revolutionised the sport and brought its inventor Olympic gold.

Southern Sweden braced for mighty Storm Gorm
A woman watches Storm Egon from Malmö's Västra Hamnen district. Photo: Jonas Nilssen/TT

Southern Sweden braced for mighty Storm Gorm

4 hours ago

Southern Sweden was braced for a battering on Sunday night, as Storm Gorm, which forecasters predict could reach hurricane strength, rampaged its way across Denmark.

Hijab mural painted over with hair at Swedish mall
The centre's management insisted that hair (right) was painted over the hijab (left). Photo: Pia Jönsson/Facebook

Hijab mural painted over with hair at Swedish mall

18 hours ago

A shopping centre in Sweden forced a youth group it had commissioned to paint a mural to cover up a hijab they had put on a woman by concealing it under a haircut.

Accent with bizarre 'yes' is 'sexiest in Sweden'
Just breathe in if you mean yes. Photo: Mötesplatsen.se

Accent with bizarre 'yes' is 'sexiest in Sweden'

1 day ago

Their word for ‘yes’ is limited to a pursing of the lips and a slight intake of breath, but according to a new survey Norrlanders have the sexiest accent in Sweden.

Sweden Democrats eye power after border move
Jimmie Åkesson at the Sweden Democrat's national day in Lund. Photo: Björn Lindgren/TT

Sweden Democrats eye power after border move

1 day ago

The leader of the anti-immigration Sweden Democrats on Saturday hailed the Nordic country's dramatic tightening of asylum policy, arguing that it would open the way for his party to join a future right-wing government.

14,000 illegal immigrants disappear without trace
Swedish police officers patrolling Stockholm. Photo: Tomas Oneborg/SvD/TT

14,000 illegal immigrants disappear without trace

1 day ago

More than 14,000 foreign nationals told to leave Sweden have instead gone underground, with police saying there is little they can do to enforce deportation orders.

Ahoy! Swede builds giant pirate ship in his garden
This picture of the boat has more than 14,700 likes on Facebook. Photo: Private

Ahoy! Swede builds giant pirate ship in his garden

1 day ago

A Swedish man found Facebook fame after pictures of a giant pirate ship he built for his children when he was on sick leave from work went viral on Friday.

'She's a forerunner and inspiration for startups'
Niklas Zennström, Jane Walerud and Jessica Stark. Photo: SUP46

'She's a forerunner and inspiration for startups'

2 days ago

A US-born entrepreneur who has helped pave the way for women in tech has joined the ranks of some of Sweden's top innovators and businesspeople in a Swedish startup hall of fame.

Swedish court: 'We cannot ban Pirate Bay'
Bredbandsbolaget was not compelled to block the Swedish file-sharing site, Pirate Bay. Vilhelm Stokstad / TT

Swedish court: 'We cannot ban Pirate Bay'

2 days ago

In a landmark decision, a Swedish court on Friday ruled that the country's internet service providers cannot be forced to block controversial Swedish file-sharing site Pirate Bay.

Sponsored Article
11 reasons students pick Stockholm University
POLL: Swedes back new asylum rules
Sponsored Article
Top five UK weekend getaways from Sweden
Five weirdest Christmas attacks on Sweden's famous straw goat
Sponsored Article
After Paris: 'The war is not only against Isis'
Blog updates

25 November

So What Does An Ambassador Do? (The Diplomatic Dispatch) »

"I know that my mum is super proud that I’m an Ambassador. But if you asked..." READ »


20 November

Editor’s blog, November 20th (The Local Sweden) »

"Hi readers, It has been a long and busy week for The Local as we reported on..." READ »

Five myths about Sweden's refugees
Sponsored Article
How Stockholm solved a startup’s housing crisis
How did this missing Swedish cat turn up in southern France?
Sponsored Article
Swedish researchers find Ice Age 'missing link'
Sponsored Article
Lofsdalen: The real Swedish wilderness
Sponsored Article
Beaches, bikes, and buds: studying in Malmö
Would you eat this Swedish pizza?
People-watching: November 25th
What do Swedes want for Christmas?
GUIDE: How to help refugees if you live in Sweden
Sponsored Article
Sweden must combat extremist 'mirage'
Mystery ice circle in Swedish river
IN PICTURES: New royal winter snaps of Sweden's Princess Estelle
Property of the week: Kungsholmen, Stockholm
Sponsored Article
How to figure out healthcare abroad
Stockholm film festival's top movies
Ola Ericson/imagebank.sweden.se
Sponsored Article
Stockholm: the new epicentre of global leadership
Susanne Walström/imagebank.sweden.se
Sponsored Article
‘Food choices in Sweden destroy forests in Asia’
People-watching: November 20th-22nd
Swedish King calls for bathtub ban
Analysis & Opinion
Why you should care about Sweden raising its terror threat level
Sponsored Article
The cheapest and fastest way to transfer money
Stockholm's best international bars
Is this the best warning sign ever?
Why are more Swedes getting fat?
Sweden's tribute to Paris victims
What is Sweden's sexiest name?
VIDEO: Madonna's emotional tribute to Paris victims at Stockholm gig
Nine of the merriest Swedish Christmas fairs
Sweden cashes in on new kronor banknotes
jobs available
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at: