The market for renting out houses and villas in Sweden has grown sharply in 2025. Many people are now choosing to keep their houses and rent them out while waiting for a more stable sales market in 2026. But being a landlord for a small house involves different challenges and – fortunately – more favorable tax rules than for an apartment. This guide is tailored for expats in Sweden looking to navigate the rental market.
In this guide, we'll go through everything you need to know for a safe and profitable rental of your villa in Sweden.
1. Tax Rules: The Favorable 20 Percent Deduction for Swedish Homes
When you rent out a small house (villa, townhouse, or ägarlägenhet - owner-occupied apartment) in Sweden, you are entitled to significantly larger tax deductions than when renting out a bostadsrätt (cooperative apartment). As a private individual, you can make the following deductions:
- Standard deduction: SEK 40,000 per year. This applies to all rental income, regardless of the type of property.
- Special deduction for small houses: You can deduct an additional 20% of the total rental income. This is specifically for houses and aims to cover wear and tear.
This means you can receive a significant amount of money each year completely tax-free. The purpose of the 20 percent deduction is to cover the operating costs (water, electricity, garbage collection) that you as a homeowner usually pay for.
Example of Tax Calculation for Expats in Sweden
Let's say you rent out your villa for SEK 15,000 per month, giving an annual rental income of SEK 180,000. Here's how you calculate your tax:
- Rental income: SEK 180,000
- Standard deduction: -SEK 40,000
- 20% deduction: 180,000 SEK * 0.20 = -SEK 36,000
- Taxable income: 180,000 - 40,000 - 36,000 = SEK 104,000
Only SEK 104,000 of your rental income will be taxed. Depending on your marginal tax rate in Sweden, this could mean a tax of approximately SEK 30,000 - 40,000 instead of double that amount without these deductions. Remember to declare this income on your annual Swedish tax return (inkomstdeklaration).
2. Setting the Right Rent for Your Swedish House
According to the Private Housing Rental Act (Privatuthyrningslagen), which governs renting out privately owned homes in Sweden, you can charge a rent that covers your operating costs plus a reasonable rate of return on the market value of the house. This differs slightly from renting out apartments where rent control might apply.
- Operating costs: Electricity, heating, water, insurance, internet and ongoing maintenance. Keep detailed records of these expenses.
- Capital cost: A rule of thumb is to use the Riksbank's (Swedish central bank) policy rate plus a few percentage points multiplied by the property's value. This reflects the opportunity cost of having your capital tied up in the house. Check the Riksbank's website for the current policy rate (styrränta).
Example: If the house is worth SEK 5 million and we estimate a return rate of 4%, the capital cost is SEK 200,000 per year (approximately SEK 16,600/month). Add your actual operating costs to arrive at a reasonable rent level.
Step-by-Step: Calculating the Rent for Your Swedish Villa
- Determine the market value: Find out what similar houses in your area have recently sold for. Use services like Booli.se or Hemnet.se.
- Determine the rate of return: Riksbank's policy rate + 2-3%. Check the Riksbank's website for the current rate.
- Calculate capital costs: Market value * rate of return.
- Add operating costs: Sum up all your expected operating costs for the year.
- Total annual cost: Capital costs + operating costs.
- Monthly rent: Total annual cost / 12.
Remember to factor in the standard of the house, its location, and any included amenities when setting the final rent.
3. Rental Agreements: What to Include in Sweden
A solid rental agreement (hyresavtal) is crucial. It protects both you and your tenant. Here's what to include:
- Names and contact information: Of both landlord and tenant.
- Property address: The exact address of the house.
- Rental period: Start and end dates of the rental agreement. Specify if it's a fixed-term or indefinite agreement. Note that fixed-term agreements in Sweden often automatically extend if not properly terminated.
- Rent amount: Clearly state the monthly rent.
- Payment terms: How and when the rent should be paid. Direct deposit to a Swedish bank account is common.
- Deposit: If a deposit is required, specify the amount and the conditions for its return.
- Utilities: Specify which utilities are included in the rent and which are the tenant's responsibility.
- Maintenance: Clarify responsibilities for maintenance and repairs. In Sweden, the landlord is generally responsible for major repairs.
- Termination terms: How the agreement can be terminated by either party. Swedish law provides tenants with significant protection against eviction.
- House rules: Any specific rules for the property, such as noise restrictions or pet policies.
Consider using a standard rental agreement template available from Swedish real estate organizations or consulting with a lawyer to ensure compliance with Swedish law.
4. Legal Considerations for Landlords in Sweden
Renting out property in Sweden is governed by laws that strongly protect tenants. Here are key things to be aware of:
- Besittningsrätt (Tenure rights): Tenants in Sweden often have strong tenure rights, making it difficult to evict them, especially if they have lived in the property for a long time.
- Rent control: While rent control doesn't directly apply to houses, the rent must still be reasonable. A tenant can challenge the rent with the Hyresnämnden (Rent Tribunal) if they believe it's too high.
- Maintenance responsibilities: As a landlord, you are responsible for maintaining the property in a habitable condition.
- Notice periods: The notice period for terminating a rental agreement varies depending on the length of the tenancy and the type of agreement.
- Discrimination: You cannot discriminate against potential tenants based on their race, religion, gender, or other protected characteristics.
It's advisable to familiarize yourself with the Swedish Tenancy Act (Hyreslagen) and seek legal advice if you have any questions or concerns.
5. Practical Tips for Renting Out Your House in Sweden as an Expat
- Learn Swedish rental terminology: Understanding terms like hyresavtal, besittningsrätt, and Hyresnämnden will help you navigate the rental process.
- Get a Swedish bank account: This is essential for receiving rent payments and paying bills.
- Consider using a property management company: If you're not comfortable managing the property yourself, a property management company can handle everything from finding tenants to collecting rent and managing maintenance.
- Take high-quality photos: Good photos are essential for attracting potential tenants.
- Be responsive to inquiries: Respond promptly to inquiries from potential tenants.
- Screen tenants carefully: Check references and do a credit check to ensure that tenants are reliable and can afford the rent.
- Get insurance: Make sure you have adequate insurance to cover any damage to the property. Contact your insurance company to ensure your policy covers rental situations.
- Be aware of Swedish cultural norms: Swedes value punctuality, cleanliness, and respect for privacy.
6. FAQ: Renting Out Your House in Sweden
Q: How much tax will I pay on rental income in Sweden? A: You will pay tax on your rental income after deducting the standard deduction of SEK 40,000 and the special deduction of 20% for small houses. The remaining amount will be taxed at your marginal tax rate.
Q: Can I rent out my house furnished in Sweden? A: Yes, you can rent out your house furnished. However, you may need to provide an inventory of the furnishings and their condition.
Q: What happens if my tenant damages the property? A: The tenant is responsible for any damage to the property that is caused by their negligence or intentional acts. You can deduct the cost of repairs from their deposit or pursue legal action if necessary.
Q: How do I evict a tenant in Sweden? A: Evicting a tenant in Sweden can be difficult due to strong tenant protections. You must have a valid reason for eviction, such as non-payment of rent or breach of the rental agreement. You may need to go to the Hyresnämnden to obtain an eviction order.
Q: Where can I find a standard rental agreement template in Sweden? A: You can find standard rental agreement templates online from organizations like the Swedish Real Estate Association (Fastighetsägarna) or from legal websites.
By following these guidelines, you can successfully rent out your house in Sweden and generate a reliable income stream while complying with Swedish laws and regulations.
