• Sweden's news in English
 

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
Lukewarm support for 'alternative pride march'
Participants were outnumbered by some 100 counter-demonstrators. Photo: Bertil Ericson/TT

Lukewarm support for 'alternative pride march'

Fewer than a couple of dozen demonstrators turned up to walk in a controversial gay rights parade organized by far-right campaigners in Sweden on Wednesday, according to police. READ  

Swedish police probe mysterious powder
A Swedish police car. File photo: Mikael Fritzon/TT

Swedish police probe mysterious powder

UPDATED: Suspicious white powder sent to Sweden's public broadcaster SVT's offices in Blekinge has been found to be harmless, a police spokesperson told The Local on Wednesday afternoon. READ  

Hedgehogs 'kicked like footballs' in Sweden
The centre suspects that at least ten of the 118 hedgehogs the centre has taken in so far this year have been hurt by people. File photo: Drago Prvulovic/Scanpix

Hedgehogs 'kicked like footballs' in Sweden

Shocking reports from a rescue centre in western Sweden about cruel abuse of hedgehogs have put the Nordic country's reputation as an animal-friendly nation in a different light. READ  

Swedish streaming site to shut down after raid
Swefilmer administrator Ola Johansson has announced that the site will close for good on Friday July 31st. Photo: Vilhelm Stokstad / TT

Swedish streaming site to shut down after raid

A popular Swedish film-streaming site has announced that it will shut down after police arrested and searched the home of one of the site’s administrators. READ  

Sweden sitcom pulled over 'craptastical' ratings
Welcome to Sweden actors Lena Olin, Greg Poehler and Josephine Bornebusch. Photo: Nora Lorek/TT

Sweden sitcom pulled over 'craptastical' ratings

The creator of 'Welcome to Sweden' has announced that NBC has cancelled the Swedish-American sitcom in the US because of "craptastically low ratings". READ  

Salvagers deny Swedish sub wreck was PR stunt
Ocean X Team members Peter Lindberg and Dennis Åsberg. Photo: Ocean X Team

Salvagers deny Swedish sub wreck was PR stunt

Speculation was running high on Wednesday over the discovery of a wrecked submarine off the coast of Sweden, after the military said it was likely a Russian vessel which ran aground a century ago. READ  

The Local List
Nine ways to become a truly Swedish woman
How to become a Swedish woman. Photo: Susanne Walström/imagebank.sweden.se

Nine ways to become a truly Swedish woman

Have you ever paid for yourself on a date - or yelled at a man for whistling at you on the street? Then you may be more typically Swedish than you think. We’ve put together a list of nine experiences that make a truly Swedish woman. READ  

Malmö police shortages 'putting public at risk'
Police investigating the latest in a series of explosions in Malmö on Sunday. Photo: Johan Nilsson/TT

Malmö police shortages 'putting public at risk'

Malmö's summer of violence coupled with police staff shortages over the holiday season could be putting the public at risk in Sweden's third biggest city, a police union said on Wednesday. READ  

Swedish sub wreck an imperial Russian vessel
A Som class submarine similar to the one believed to have been found in Swedish waters. Photo: Wikimedia Commons

Swedish sub wreck an imperial Russian vessel

UPDATED: A wrecked submarine found off the coast of Sweden is likely a Russian vessel that ran aground a century ago, the Swedish Armed Forces told The Local on Tuesday afternoon. READ  

Analysis
Why are Swedes so scared of Russian subs?
Not the Russian submarine mentioned in the article. Photo: AP Photo/Dmitry Lovetsky

Why are Swedes so scared of Russian subs?

UPDATED: News a wrecked Russian submarine had been found in Swedish waters stirred debate in Sweden on Tuesday - nine months after another high-profile hunt for a mystery underwater vessel. The Local asked an expert about the Swedes' seeming obsession with Russian submarines. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
Why are Swedes so scared of Russian submarines?
Lifestyle
New snaps of Sweden's baby prince
National
Free bus cards for refugees in Sweden
Gallery
Property of the week: Simrishamn, Skåne
National
Why has Snoop Dogg said he will never return to Sweden?
Blog updates

24 July

Editor’s blog, July 24th (The Local Sweden) »

"Dear readers, Our most read story this week was our tongue-in-cheek guide on how to become a..." READ »

 

15 July

Climate Change: A New Risk Assessment (The Diplomatic Dispatch) »

"Climate change is one of the most serious threats facing the world today.   The UK is..." READ »

 
 
 
Sponsored Article
Getting pregnant the Swedish way
Features
Five outrageously harsh tourist comments about Sweden
Sponsored Article
Why is Sweden still working with Russia?
Gallery
People-watching: July 24th-26th
Travel
Seven ways to beat the Swedish rain
National
Should Sweden's alcohol stores be open on weekends?
National
How to become a Swedish man
Gallery
People-watching: July 22nd
Lifestyle
How to never miss your favourite features on The Local
National
Royal husband on 'breadwinner' role
National
Stockholm to ban all cars for one day
Sponsored Article
Outsourcing drives Apreel's Europe growth
Gallery
Property of the week: Sölvesborg, Blekinge
National
Questions over who would replace Swedish PM in a crisis
Gallery
IN PICTURES: July summer snaps
Gallery
People-watching: July 17th-19th
National
Why are Swedish women joining Isis?
Travel
Ten Stockholm streets you just have to walk down
Sponsored Article
'Swedish women must demand their partners use a condom'
Sport
Did UK football parents threaten Swedish kids?
Technology
Stockholm scientists find world's oldest sperm
Gallery
People-watching: July 15th
National
Angry Swede uses bird nest as fake speed camera
National
Meatball row as Ikea changes recipe
National
Sweden's new princess in spotlight
National
Slimy slugs go on sale to raise cash for EU migrants in Sweden
National
Crown Princess Victoria turns 38
Sponsored Article
Harstena: Life in Sweden's secret archipelago
National
Is this the best marriage proposal story in Malmö's history?
Sponsored Article
'Biofuels critical for climate-friendly flights'
Sponsored Article
Gaps don't have to kill your Swedish CV
National
Why summer could be the best time to invest in a Swedish property
Gallery
Property of the week: Bollnäs, Hälsingland
National
Swedish house on sale for one krona
National
Would you give this ugly food a home?
Gallery
People-watching: July 10th-12th
Travel
Foreign hikers in Sweden set to get more help in English
National
Prince Nicolas enjoys first summer
National
Meet the amazing Swedish granny who loves theme parks
National
Stockholm to host Eurovision 2016
Travel
Five quirky summer tours in Sweden
Gallery
People-watching: July 8th
National
Is this Sweden's biggest burger?
Business & Money
How Greece is affecting Sweden
Sponsored Article
'Swedish industry needs US trade deal'
National
Hundreds mourn teen Swedish murder victim
Sponsored Article
Sweden's 'incredible' chance to connect
Sponsored Article
'Today's refugees could be tomorrow's Zlatan'
Sponsored Article
Crans-Montana: International expat hub
Sponsored Article
‘I don’t feel Swedish, I feel international’
Sponsored Article
VIP Mingle at Almedalen's hottest event
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

3,304
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