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Selling an old flat after 30 years in Sweden

Inheriting laws/Taxation for selling old flat

andreim
post 24.Sep.2013, 08:08 PM
Post #1
Location: Stockholm
Joined: 26.Jan.2012

Hi,

Let's make 2 scenarios:

1. you have someone who you know and he intends to sell you its own flat which he owns it from 70's. It was bought cheap (maybe few dozens of thousands of SEK) and now that person wants to move in a more expensive flat. His old flat is valued at 1.8MSEK (not renovated), while the new one costs 2.4MSEK (more larger, renovated).

Will this person have to pay to Skatteverket/Town Hall anything for selling this flat after so many years?

Purchase price in 70's: 20.000SEK
Selling price now 1.8MSEK

How is such tax calculated, if it does exist?

2. can your kids inherit your flat or what you have (car, holiday house, expensive belongings) without being needed to pay anything to Tax Office? I am curious how the law is in Sweden, because in my country you just get everything in a natural way, without being chased for inheriting stuff.

Can someone please clarify for me these laws as they are currently now in Sweden?

Thank you,
Andrei
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AgeOfReason
post 25.Sep.2013, 09:29 AM
Post #2
Location: Stockholm
Joined: 1.Sep.2013

There is no tax on inheritance or gifts in Sweden, what happens is that for property when it is inherited or given away the person that receives it also takes ownership of the purchase price the person paid when originally buying the property. Tax is calculated on the profit when the property is sold. In simple form it is 30% of the profit, which would be 30% of 1.8M minus 20k SEK.

There are special rules that can be used for property that was purchased before 1974, for a bostadsrätt it can be calculated something like 150% of the value of the share in the BRF at time of formation (if I remember correctly)

You can invest a portion of the profit into a new property and that delays the tax due, however you pay an annual interest on that amount.

In Sweden There ain't no such thing as a free lunch
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axiom
post 25.Sep.2013, 11:59 AM
Post #3
Location: Stockholm
Joined: 24.May.2011

As above you pay tax on the profit, however if you are going to use the money to buy a new apartment you can delay paying the tax until the new apartment is eventually sold at some point in the future. This is called "Uppskov". I think however you do pay some interest on the owed tax, albeit rather small, 0.5%.
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joe5451
post 25.Sep.2013, 04:06 PM
Post #4
Joined: 23.Dec.2009

QUOTE (AgeOfReason @ 25.Sep.2013, 09:29 AM) *
In simple form it is 30% of the profit, which would be 30% of 1.8M minus 20k SEK.

It's actually 30% of 22/30 of the profit, which works out to be 22%. Confusing!

QUOTE (axiom @ 25.Sep.2013, 11:59 AM) *
As above you pay tax on the profit, however if you are going to use the money to buy a new apartment you can delay paying the tax until the new apartment is eventually sold at ... (show full quote)

Uppskov is much more than that! You have to pay schablonintäkt as well. Plus when you consider the tax deductions allowed on normal loans it is equivalent to 3.25%. So if you can borrow for less than that (or get a higher savings rate, unlikely) then it is worth it to use uppskov.
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andreim
post 25.Sep.2013, 04:18 PM
Post #5
Location: Stockholm
Joined: 26.Jan.2012

Meanwhile, I have found some good references regarding my question:

"Om du säljer din bostad för att köpa en ny bostad och du får en skattepliktig vinst, har du möjlighet att ansöka om uppskov med att betala skatt på vinsten till ett senare år.

Här under rubrikerna till vänster kan du bland annat läsa om förutsättningarna för att få uppskov och om återföring (beskattning) av uppskovsbeloppet.

Har du ett uppskovsbelopp ska du årligen betala en skatt på ca 0,5 procent av detta belopp. Läs om skatten under rubriken Schablonintäkt till vänster."

Sources:
http://www.skatteverket.se/privat/skatter/...fe80009532.html
http://www.skatteverket.se/privat/blankett...6800013507.html
Discussions: http://www.thelocal.se/discuss/index.php?showtopic=20117
Article: http://www.thelocal.se/15150/20081022/
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andreim
post 25.Sep.2013, 04:26 PM
Post #6
Location: Stockholm
Joined: 26.Jan.2012

Someone told me today that if you buy a flat and sell it within the same year, you will have to pay 30% tax. But, if you buy it this year and resell it next year, the tax is 22% for the profit you make, if the price will increase...
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Belize
post 25.Sep.2013, 11:14 PM
Post #7
Joined: 21.Nov.2009

I don't know the answer but would suggest you ask an accountant familiar with Swedish taxes or perhaps a real estate agent. The tax office itself would also be a good source to find out. Might take awhile but perhaps more reliable information.
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