• Sweden's news in English
 
The Lowdown: Sweden's new subletting law

The Lowdown: Sweden's new subletting law

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

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
My Swedish Career
Meet the Italian sketching a new Swedish future
Filippo Vanzo. Photo: Private

Meet the Italian sketching a new Swedish future

For this week's My Swedish Career, The Local chats to Filippo Vanzo, a freelance illustrator who started to picture life in Stockholm after meeting his Swedish girlfriend online. READ  

Swedish parties in secret election talks: report
Photo: TT

Swedish parties in secret election talks: report

The government and opposition parties are reported to be conducting negotiations in a bid to avoid government chaos, putting the new March election in doubt, according to a media report. READ  

Icy roads as Swedes head home for Christmas
Photo: TT

Icy roads as Swedes head home for Christmas

The Swedish weather agency has issued a warning for icy roads across the country as many city-dwellers head out to the countryside for Christmas. READ  

Bomb blasts rock Malmö's Rosengård
Photo: TT

Bomb blasts rock Malmö's Rosengård

Police suspect that a rental dispute is behind a twin explosion which rocked the area around Ramels Väg in the Rosengård area of Malmö over the weekend. READ  

Romanian beggar lands bumper lottery win
Photo: TT

Romanian beggar lands bumper lottery win

A Romanian man who slept under a bridge in a Swedish city and lived by begging recently landed a 210,000 kronor ($27,000) lottery win after buying a ticket on impulse, saying he now wants to build himself a house. READ  

Agency: Dream in vain of a white Christmas
There is little chance of snow in Stockholm this Christmas. File photo: TT

Agency: Dream in vain of a white Christmas

Sweden's weather agency SMHI has warned those living in southern parts of the country to stop dreaming of a white Christmas or risk disappointment. READ  

Shots fired at Stockholm migrant camp: report
File photo: TT

Shots fired at Stockholm migrant camp: report

Stockholm police have launched an investigation after reports that shots were fired at an EU migrant camp in the south of the city on Saturday. READ  

Löfven pushes Swedish 'American Dream'
Photo: TT

Löfven pushes Swedish 'American Dream'

Swedish Prime Minister Stefan Löfven used his Christmas speech on Saturday to launch his idea of the "Swedish Promise", an equivalent to the more familiar "American Dream". READ  

Hoho: Estelle records cute Christmas message
Princess Estelle pictured in her 2014 Christmas jumper. Photo: Kate Gabor/royalcourt.se

Hoho: Estelle records cute Christmas message

Video: Sweden's little Princess Estelle has got into the spirit of Christmas by recording a special message together with her parents. READ  

Swedes over-estimate English abilities: expert
BP chairman Carl-Henric Svanberg suffers a linguistic let-down at The White House in 2010. File photo: TT

Swedes over-estimate English abilities: expert

Swedes are generally confident in their own English abilities, a new survey has shown, although one expert has questioned whether this belief is misplaced. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
People-watching: December 20th - 21st
Lifestyle
What's On in Sweden: December 18th to 25th
National
'Unprecedented' Russian activity: Armed Forces
Society
Interview: The Local chats with Melinda Gates
Society
VIDEO: Stockholmers try out some Swedish tongue twisters
Blog updates

19 December

-t or no -t? (The Swedish Teacher) »

"Hej! There are many things in the Swedish language that can give you a grey hair or two,..." READ »

 

19 December

Editor’s Blog, December 19th (The Local Sweden) »

"Hello readers, Father Time has taken another week from us, but never fear – good old Father..." READ »

 
 
 
Society
Eight things to do when it gets dark in Umeå
National
Inside Sweden's first 'light therapy' school
Finest.se
Gallery
People-watching: December 17th
Estelle through the years
Gallery
Princess Estelle through the years
Society
Why are there so many 100-year-olds in one Swedish town?
Society
Is it time to better celebrate Sweden's diverse identity?
Gallery
Property of the week: Huddinge
National
Why has The Local got a new logo?
National
CATCH UP: Russian plane in Baltic near-miss drama
Lifestyle
How my compass drew me to Sweden
National
The man whose memory you need to remember
Gallery
People-watching: December 13th - 14th
Sponsored Article
How to get your own office anywhere in the world
Politics
'Our party will stand alone': Stefan Löfven
Society
The Local chats to Ruben Östlund, director of Golden Globe nominated Force Majeure
Lifestyle
Ten things to know before a Swedish party
Lifestyle
What's On in Sweden: December 12th to 19th
Gallery
IN PICTURES: The 2014 Nobel Banquet
National
The Local's guide to the Nobel Prizes 2014
Education
Introducing... Education in Stockholm
Society
The Swedish Christmas market with a twist
Lifestyle
Why do so many Swedes have tattoos?
Society
Get 20% off Swedish Christmas decorations
National
Dewani family: We only heard half the story
Business & Money
Business in Stockholm: 'efficiency is money'
Gallery
Property of the week: Östermalm
National
Meet the Swedes hosting festive feasts for 'lonely' guests
Gallery
TIMELINE: Swedish honeymoon killing murder trial
Gallery
People-watching: December 7th
Gallery
IN PICTURES: What's it like to fly planes in Sweden?
National
Submarine hunters 'robbed' of reward cash
National
The Local's Countdown to Christmas
National
'Dangerous' USB charger recalled in Sweden
Gallery
IN PICTURES: Sweden's King and Queen wrap up France tour
National
Analysis: Should Snowden get asylum in Sweden?
National
Swedish schoolboy in female saint role row
Gallery
IN PICTURES: Sweden's political crisis unfolds
Gallery
People-watching: December 3rd
National
What happened to Sweden's ice bucket cash?
Sponsored Article
SIS: the thinking behind globalised learning
Sponsored Article
Introducing... Family life in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

816
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:
psdmedia.se
The Local Spain is hiring!
The Local is seeking a new editor for our site in Spain to join our growing team of internationally-minded, driven, ambitious and clued-up journalists.
Details and how to apply
Counselling and Psychotherapy in English
Sometimes living in another culture can cause stress, confusion and feelings of sadness and loneliness. Talking to a professional psychotherapist/counsellor might help you. I am a UKCP Reg. psychotherapist. My practice is in Södermalm, Stockholm.
Contact me to discuss your options