BRF Capital Contribution
Income Tax Act (Inkomstskattelagen) Ch. 46 (capital gains on sale of cooperative apartment)
What does it mean?
Capital contributions are additional payments made by members of a housing cooperative to reduce the association's debts. These can be voluntary or mandatory contributions decided at the annual general meeting. The purpose is to improve the association's finances, reduce interest costs, and eventually lower monthly fees.
From a tax perspective, capital contributions can be advantageous. The amount you pay as a capital contribution can be added to your acquisition cost when selling the apartment, reducing the capital gain and thus the tax. This applies provided the contribution was used to amortize the association's loans. Keep all receipts and meeting minutes as documentation.
Key Points
- Additional payment to reduce the association's loans and interest costs
- Can be voluntary or mandatory — decided at general meeting
- Can be added to acquisition cost at sale (tax advantage)
- Requires that the contribution was used to amortize the association's loans
- Keep receipts and meeting minutes as documentation
Practical Tip
If your BRF offers capital contributions — calculate the tax advantage. A contribution of SEK 100,000 can reduce your future capital gains tax by SEK 22,000 (22%). Discuss with your bank whether it's worth prioritizing.
Legal Basis: Income Tax Act (Inkomstskattelagen) Ch. 46 (capital gains on sale of cooperative apartment)