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TAX

How to get tax deductions on household maintenance in Sweden

Did you know you can get deductions for household costs, from cleaning to renovations? Here's how.

Swedish banknotes and cleaning equipment
These may be some of the most important tax deductions to be aware of. Photo: Jonas Ekströmer/TT

Sweden’s ROT and RUT tax deductions mean that you can get a significant chunk of money off the cost of a range of services, repairs and maintenance costs. 

The goal of the scheme is to boost employment in these sectors by lowering cost to the end-consumer and raising demand, and to reduce the risk of workers taking cash-in-hand jobs and not declaring their earnings.

RUT stands for cleaning, maintenance and laundry (rengöring, underhåll, tvätt) and applies to domestic work such as:

  • Cleaners, including professional cleaning before moving or selling a home
  • Gardening
  • Snow removal
  • Minor installations, repairs and services of home IT equipment
  • Repair of household appliances
  • Laundry of home textiles or clothes at a laundry facility (including the cost of transportation)
  • Furnishing services (including furniture assembly)
  • Transporting household goods to a secondhand shop or to storage facilities

On these services, you can get a 50 percent tax deduction with a maximum annual cap of 75,000 kronor which was increased from 50,000 as of January 1st 2021. This means you can get 50 percent off services worth up to 150,000 kronor.

ROT stands for repairs, conversions and extensions (reparation, ombyggnad, tillbyggnad) and covers this type of building work. However, building a new house or converting or extending a new house (one that is exempt from municipal property tax) is not covered.

On these services, you can get a 30 percent tax deduction, up to a maximum of 50,000 kronor.

It’s important to note that each individual can only receive a total of 75,000 kronor in ROT and RUT deductions per year. So if you’ve received the maximum of 50,000 kronor in ROT deductions, you can only receive 25,000 kronor for RUT, and if you’ve received the maximum of 75,000 kronor in RUT deductions you cannot get any deductions for ROT work. 

In order to claim ROT and RUT deductions, you need to be a Swedish taxpayer, aged over 18 and liable for tax during the tax year. Only the labour cost is deductible, not the cost of any materials or equipment, and you need to pay for the service electronically – this is so that the business is traceable.

To get the RUT deduction, you do not need to own the home (so renters are eligible) but you must live there all or part of the time. You can also get the deduction for work carried out in the home your parents live in, if you are the one who paid for the work.

For ROT deductions, you also need to own the property where the work is done (either owning the property or apartment itself, or a bostadsrätt) and live in it at least some of the time – so your primary home and any secondary residence or summer house are eligible, but not a property you rent out.

The work cannot be done by a family member.

This maximum amounts listed above are calculated per person rather than per household, so if there is more than one adult living at the same address, you can each use this amount, but if you own multiple properties you do not have a separate maximum for each property.

It’s the contractor, or the person providing the work, who should make the deduction on your invoice, but you should  keep track of how much of each deduction you receive over the tax year (you can do this by logging into Skatteverket, the Swedish Tax Agency).

If you know you’ve reached the ceiling for your deductions, you should let them know so that they can make out your invoice without the deductions.

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ECONOMY

EXPLAINED: What can foreigners in Sweden do about the weak krona?

The Swedish Krona last week hit a record low against the dollar, hammering the international buying power of anyone earning their salaries or holding assets in the currency. We asked Johan Löf at Handelsbanken what they can do.

EXPLAINED: What can foreigners in Sweden do about the weak krona?

How low is the krona right now? 

On Tuesday, September 27th, the krona to dollar exchange rate hit an all-time-low of 11.37, easily beating the previous record low for the currency of 11.04, which it reached at the nadir of the dot com bust back in 2001. At the time of the financial crisis in 2008, a dollar would have got you less than 6 kronor, meaning the currency has almost halved in value in less than 15 years. 

A euro now gets you 10.9 kronor, which is not quite a record, with it briefly topping 11.4 in 2009, but more than it has been for most of the past decade. 

The only major currency which is more or less stable against the krona is the pound, which will now buy about 12.39 kronor, down from 13 in February, but above the levels of around 10.5 the pound hit shortly after the UK voted to leave the European Union. 

Why is the krona worth so little? 

Johan Löf, the head of forecasting at the Handelsbanken bank, told The Local, that the krona always tended to take a hit at times of financial uncertainty. 

“The krona is a relatively small currency much like the Swedish economy is a relatively small economy,” he said. “You could compare it to a small boat sailing the big ocean, so when you don’t go on the course that you thought you were going, it can be a bit of a shaky ride,” he said.

“Right now with financial market conditions being volatile, with a lot of uncertainty and risks, the Swedish krona takes a hit. Investors and various agents of the economy don’t want to hold so much of this smaller currency. Instead, they they go to safe havens like the US dollar.

“So even though there are fundamentals that would suggest that the Swedish kroner will strengthen again over time, for the time being and for some foreseeable future, we think that the krona will remain quite weak.”

How are foreigners living in Sweden affected? 

It very much depends on their individual financial situation: which currency they earn their salary in, which currency they hold assets in, and which currencies they have the highest outgoings in. 

People who live and earn in Sweden, but travel regularly to countries with stronger currencies, or perhaps send remittances back to family at home, are likely be negatively affected, Löf said. 

“It makes you lose purchasing power in these other countries: you get fewer goods and less services for the money that you have in the Swedish currency.”

It’s a similar situation for people or small businesses based in Sweden, who need to, or perhaps only want to, buy goods outside of Sweden. 

On the other hand, for people who have substantial savings abroad in dollars or euros, this might be an opportunity to convert them into kronor for use in Sweden.  

“If you have savings abroad, and you feel the need to use some of those savings, when you then sell your foreign currency to buy Swedish kronor, then you will get more Swedish kronor,” Löf explained. 

What can foreigners living in Sweden do to lessen the impact of a weak krona? 

Change the currency in which you get paid 

The best way to protect against currency exchange shocks is to make sure that you’re paid in the same currency that you spend in, so if you live in Sweden but have a lot of your outgoings abroad, it’s an advantage to be paid in dollars or euros. 

If you’re considering getting a new job, perhaps favour international employers that can pay you in one of the major currencies, or if you work for a big international company, perhaps you can ask to be paid in a different currency. 

Get freelance or part-time work outside of Sweden

If you work as a freelancer, or have some spare time for additional work, consider getting part-time freelance gigs with companies abroad that pay in euros or dollars. The lower the krona sinks, the higher your real wage when you spend in Sweden. 

Time major spending for the best point in the market 

If you have savings in kronor and are considering, for instance, buying a holiday house abroad, it is probably worth waiting until the kronor has strengthened and the Swedish economy is back growing strongly. 

Similarly, if you have savings outside of Sweden in euros or in dollars, and have been planning on buying a property in Sweden, now might be a good time to consider doing so (although it may be worth waiting a few months until interest rate rises have been fully reflected in reduced Swedish property prices).

Get a multiple currency account 

It can be helpful to have an account in multiple currencies, such as those provided by banks such as Wise and Revolut. Keeping any cash in a combination of dollars, euros and kronor can reduce your exposure to any single currency. 

The advantage for foreigners living in Sweden is that you can set up US dollar, Euro and Pound accounts, each with their own local bank number, which you can use to receive and make payments domestically in each country. 

With the krona so low right now, it may not be a good idea to convert all your assets from krona to euros or dollars right now, as the currency is probably more likely to strengthen than weaken over the coming year.

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