How to buy property in Sweden

If you buy property in Sweden trough a real estate agent the process is pretty straight forward and safe. Here is some useful information to educate yourself if you are in the process of buying property in Sweden.

The process of buying property in Sweden

As a foreigner you are allowed to buy and own property in Sweden.

It is possible to buy property straight from the owner. But common practice is to involve a real estate agent. In almost all real estate transactions on the Swedish real estate market it is the seller who hire and pay the fees for real estate agents. However it can be a good idea to hire a real estate agent that assist you in your search and that also can act as an advisor in your contacts with other estate agents and sellers. 

In Sweden its legal demand on the real estate agents that they act impartial between seller and buyer. So you should be safe in buing property from a Swedish real estate agent. In case you feel that an agent acts in an improper way you can turn to Fastighetsmäklarnämnden (the Swedish Board of Supervision of Estate Agents).

An offer to buy is usually made through the agent, who will communicate between both parties.

In brief, the process is as follows
  1. Prepare yourself through finding information and maybe hire an estate agent to help you in the process
  2. You find a property you are interested in
  3. You contact the estate agent responsible for the property
  4. You visit the property
  5. You place a bid
  6. If the bid is accepted by the seller the estate agent prepare contracts
  7. You hire an independent building surveyor to survey the property
  8. You meet with the estate agent and the seller to sign the contracts
  9. You pay 10% down payment
  10. On the access day you should do a final inspection of the property and receive the keys to the house. You also meet with buyer at your Swedish bank or the real estate agents office. The buyers bank takes care of solving the sellers mortages that has the property as a security and tranfers the rest of the money to the seller. You also sign a contract of sale (Köpebrev) that proves that you now are the owner of the property. The bank will use this contract to send in an application for land registration in your name. Within a couple of weeks you get back the contract of sale and a verification that you are now the registered owner of the property.

Responsibility for faults in property

When you buy an house in Sweden the seller can be held financially responsible for hidden fault up to 10 years after you have bought the house. However the interpretation of the term hidden faults are very narrow. Most problems that are exposed after buying a house are the responsibility of the buyer.

Common practice when you buy a house in Sweden is therefore to hire an independent building surveyor. Since the Swedish legal system puts a large part of the responsibility of potential problems with the house on the buyer. In practice the buyer can´t make the seller responsible for faults that could have been found trough an thorough investigation of the house.

Depending on your financial situation (if you are taking a mortgage, the Swedish banks will undertake a review of your financial situation for its own purposes), you may wish to hire an independent surveyor, which is common practice in Sweden.

Purchase Costs

The figures below describes the current situation (spring 2010). Depending on political situation (2010 is election year and our country might again be ruled by socialists...).

Transfer tax (stamp duty): 1,5 % of the purchase price plus 825 SEK administration fee
Mortgage deed 2 % of the amount not covered by sellers mortage deeds (the mortage deed comes with property)
Agent’s fees: n/a; seller pays

Costs of owning property in Sweden

Sweden is famous for its high taxes, however the current government has eased the tax burden for property owners. The maximum property tax for normal houses at the moment are around 6 400 SEK per year. But be aware that if you buy a really exclusive property in Sweden the socialists that are in opposition at the moment has suggested much higher property taxes.

Of course there are operating cost of the property as well including heating (can be quite expensive in the north where you have at least 6 months of winter).

Exit Costs

Capital gains tax (CGT) on the sale of a property are taxed with about 22%. Acquisition price, selling costs and costs of improvement within the last five years, from the selling price, can be offset.

Mortgages in Sweden

As a foreigners you are able to obtain a mortgage against a property in Sweden. Generally, you can borrow up to at least 75% of the property’s value.

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