Swedish tax break millions fund overseas home renovations: report
The Local/gm · 26 Sep 2011, 12:31
Published: 26 Sep 2011 12:31 GMT+02:00
The tax breaks total several million kronor, according to figures compiled by the Metro daily.
The so-called “rotavdrag” is a tax subsidy available to anyone wishing to make renovations or improvements on their homes. It was introduced as an effort to boost an under-pressure building industry and the tax break is on 50 percent of the cost of the work, up to a maximum of 50,000 kronor ($7,200) per person, per year.
Many have used it to make their houses more environmentally friendly, or undertaken larger building projects, though the authorities administering the scheme have over the past year received more than one thousand applications from Swedes doing work on their holiday homes.
The work has included the installation of swimming pools and new kitchens.
Most of the applications are for building work in France and Spain as people look to do up bathrooms kitchens and building facades.
While the tax break is available to Swedes resident in Sweden, there is nothing to preclude their use for homes outside the country, as the deductions are available to any dwelling within the EU.
“As long as the dwelling is within the EU then anyone is eligible. This applies to anyone who pays income tax in Sweden,” said the tax authority legal expert Pia Blank Thörnross to the Metro newspaper.
Last year, of the 1.2 million people who applied for the subsidy, only 35,000 reached the maximum 50,000 kronor limit.
Despite this fact, the Liberal Party (Folkpartiet) is pressing to double the limit to 100,000 kronor, reasoning that the move is of no net cost to the state.