For members


How NOT to buy an apartment in Sweden: 6 mistakes to avoid

Buying a home is often a complicated process in any country. Here are some of the pitfalls to avoid in Sweden.

How NOT to buy an apartment in Sweden: 6 mistakes to avoid
There are a few factors that could lead to surprising costs down the road. Photo: Claudio Bresciani/TT

It’s easy to get caught up in the thrill of buying a house or apartment in a country like Sweden where the bidding process usually takes place by text message, making you feel like it is almost a game. But don’t let it get the better of you – if you keep a cool head you can avoid some of these common mistakes:

Not shopping around for the best deal on your mortgage

One of the first steps of the process of buying a house or apartment in Sweden is getting a lånelöfte – a lender’s note, or literally a ‘loan promise’. This is the document in which the bank pledges in principle how much money to lend you so it is one of the most important pieces of the puzzle.

But don’t let the nerve-wracking experience of dealing with banks stop you from shopping around: it is worth comparing them to see which offers you can get, and the bank you have a current account with may not always offer the best deal. It is also possible to take out several lånelöften; this is common practice and should not have a negative effect on an otherwise sound credit report.

Not considering the extra fees

The most common form of apartment ownership in Sweden is via a housing association (bostadsrättsförening, or BRF) – where you buy into the association that owns the property (usually one or several blocks of apartments) and in turn receive the right to live in your apartment.

Each month on top of your mortgage, you will also pay fees to the BRF (avgift). These cover things like maintenance of common areas such as staircases, elevators and the communal laundry room (tvättstuga) if there is one, as well as things like plumbing, upkeep of external doors and windows.

Sometimes the fee even covers things like electricity, internet and heating. It’s important to check exactly how high the monthly fee is, and what it covers, because if you have to pay extra for hot water or electric heating, for example, that could mean a big increase to your bills each winter.

Keep an eye out for fees that could increase further down the line. Photo: Fredrik Sandberg/TT

Not checking the housing association’s finances

Speaking of that BRF, one of the crucial things to look into that often gets overlooked is the BRF’s economic state – but having this knowledge could avoid nasty surprises. If it has high debts, this leaves it vulnerable to fluctuations in the economy, which could force it to raise your monthly fee.

High debts are most common with newbuild apartments as well as any which have recently undergone major renovations. The website Alla BRF gives information about each BRF and gives them an overall ‘grade’; these grades are often shown on property site Hemnet too.

You can also look at its economic history. Most BRF’s will occasionally raise the monthly fee in line with inflation, but if the history looks erratic – for example large and sudden increases without clear reason – it could mean that its economy is not solid enough to handle unforeseen events.

Conversely, if the BRF has gone years without an increase, it could either mean that its economy is so good it has not been needed – or that a fee increase is well overdue and could potentially happen soon.

Large planned works could also lead to an increased monthly fee in the future.

Not taking storage space into account

Swedish apartments, especially in big cities, are often small – especially if you are a first-time buyer moving into the apartment on your own. The good news is that many are often ingeniously planned to make room for bulky items such as vacuum cleaners and laundry baskets – but don’t just assume that you will have somewhere to store all of this and your other stuff, check and think carefully.

A storage room will very likely be included in the building’s cellar or attic, so make sure to have a look at that space too. Think about security as break-ins do happen – do you need a special key to enter, do you have any valuable items you need to store? – and concerns such as damp or pests.

Is there enough storage space in the apartment? Photo: Maja Suslin/TT

Failing to investigate the amenities

We mentioned those communal spaces earlier. Do not forget to have a look at them, too. If your apartment does not come with a washing machine you are likely to spend far more time in the communal laundry room than you ever thought you would, so its condition and security matters.

Many apartment blocks have extra perks included in the cost that may very well be part of the appeal for you: this could include a shared events room, a small library, a guest apartment or even a sauna and gym.

Not doing further research

Reading this article is one step on the way, but it is worth also speaking with friends who have previously bought apartments in Sweden – and if you do not speak Swedish, ask a fluent friend to come with you to the viewings and to have an extra read through the documents with you.

Some of the key words you want to look out for and ask about are for example when the building last had a stambyte (replumbing). The BRF will be responsible for sorting this out, but it’s a fairly major construction project that could disrupt your life and lead to an increase to the monthly fee.

You should also find out if any renovations are scheduled for the outside of the building (fasad) and/or the windows (fönster). And do your research into any planned building works in the general area – you can find this information via the local municipality (ask for the detaljplan for the area).

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For members


Pensions in the EU: What you need to know if you’re moving country

Have you ever wondered what to do with your private pension plan when moving to another European country?

Pensions in the EU: What you need to know if you're moving country

This question will probably have caused some headaches. Fortunately a new private pension product meant to make things easier should soon become available under a new EU regulation that came into effect this week. 

The new pan-European personal pension product (PEPP) will allow savers to take their private pension with them if they move within the European Union.

EU rules so far allowed the aggregation of state pensions and the possibility to carry across borders occupational pensions, which are paid by employers. But the market of private pensions remained fragmented.

The new product is expected to benefit especially young people, who tend to move more frequently across borders, and the self-employed, who might not be covered by other pension schemes. 

According to a survey conducted in 16 countries by Insurance Europe, the organisation representing insurers in Brussels, 38 percent of Europeans do not save for retirement, with a proportion as high as 60 percent in Finland, 57 percent in Spain, 56 percent in France and 55 percent in Italy. 

The groups least likely to have a pension plan are women (42% versus 34% of men), unemployed people (67%), self-employed and part-time workers in the private sector (38%), divorced and singles (44% and 43% respectively), and 18-35 year olds (40%).

“As a complement to public pensions, PEPP caters for the needs of today’s younger generation and allows people to better plan and make provisions for the future,” EU Commissioner for Financial Services Mairead McGuinness said on March 22nd, when new EU rules came into effect. 

The scheme will also allow savers to sign up to a personal pension plan offered by a provider based in another EU country.

Who can sign up?

Under the EU regulation, anyone can sign up to a pan-European personal pension, regardless of their nationality or employment status. 

The scheme is open to people who are employed part-time or full-time, self-employed, in any form of “modern employment”, unemployed or in education. 

The condition is that they are resident in a country of the European Union, Norway, Iceland or Liechtenstein (the European Economic Area). The PEPP will not be available outside these countries, for instance in Switzerland. 

How does it work?

PEPP providers can offer a maximum of six investment options, including a basic one that is low-risk and safeguards the amount invested. The basic PEPP is the default option. Its fees are capped at 1 percent of the accumulated capital per year.

People who move to another EU country can continue to contribute to the same PEPP. Whenever a consumer changes the country of residence, the provider will open a new sub-account for that country. If the provider cannot offer such option, savers have the right to switch provider free of charge.  

As pension products are taxed differently in each state, the applicable taxation will be that of the country of residence and possible tax incentives will only apply to the relevant sub-account. 

Savers who move residence outside the EU cannot continue saving on their PEPP, but they can resume contributions if they return. They would also need to ask advice about the consequences of the move on the way their savings are taxed. 

Pensions can then be paid out in a different location from where the product was purchased. 

Where to start?

Pan-European personal pension products can be offered by authorised banks, insurance companies, pension funds and wealth management firms. 

They are regulated products that can be sold to consumers only after being approved by supervisory authorities. 

As the legislation came into effect this week, only now eligible providers can submit the application for the authorisation of their products. National authorities have then three months to make a decision. So it will still take some time before PEPPs become available on the market. 

When this will happen, the products and their features will be listed in the public register of the European Insurance and Occupational Pensions Authority (EIOPA). 

For more information: 

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.