Rental contracts for sale after court ruling

A Stockholm court has ruled that rental contracts for housing can be sold by tenants, legally. What's more the payment is exempt from tax, writes the newspaper Hem & Hyra.

The sale of rental contracts for housing is normally considered illegal. But a Stockholm court established this week a precedent for an exception: if a landlord buys out a tenant then the deal is legal. Furthermore the tenant’s remuneration is free from capital gains taxes.

The Swedish tax authorities (Skatteverket) bought the case to the administrative court of appeal arguing that a 200,000 kronor ($32,427) payment to a tenant should be taxed as unearned income.

The court ruled that as the tenant handed over the keys to the rental apartment (Hyresrätt) to the landlord and not to another tenant then the income should not be taxed as income.

The court of appeal confirmed a previous ruling by the county administrative court.

“This just adds to all the other things being done to get rid of tenants, for example the conversion of rental apartments into tenant-owner apartments. Then the state subsidies the deal by offering a tax break,” said Barbro Engman, head of the Swedish Union of Tenants (Hyresgästföreningen), to the newspaper.