The total amount of stamp duties, state levied fees paid by the acquirers of real estate, has increased dramatically and is expected to reach a record level this year, totalling SEK 11.2 billion. One of the reasons for this rise is the increased value of real estate in Sweden during recent years.
If you or your company have purchased real estate, stamp duties apply. These stamp duties are calculated on the purchase price or on the tax value of the property in the year prior to the year in which the land registration comes into effect. The alternative resulting in the highest property value comprises the basis of the calculation.
The tax amounts to 1.5 percent for private individuals and certain, specific legal entities, for example, tenant owner associations and foundations. For other legal entities, for example, limited liability companies, the stamp duty is 4.25 percent.
Stamp duties do not apply in the case of application of the cadastral registration ordinance (in Swedish, “fastighetsbildningsförrättning”). Consequently, it could be of interest for, for example, non-genuine tenant owner associations (in Swedish, “oäkta bostadsrättsföreningar) to analyse the premises for, and implement, a co-called three dimensional cadastral registration of their property in order to be classified as a genuine tenant owner association.
Neither do stamp duties apply in the case of a merger, gift or inheritance. With so-called mixed acquisition (for example a purchase contract and deed of gift) the stamp duty is usually levied only if the acquirer provides some form of compensation (for example, assumes the loan on the property) equal to at least 85 percent of the tax value of the property in the year prior to the year in which the land registration comes into effect.
In this context is should be noted that there is a government investigation underway in which the Committee executing the investigation has been requested to review certain issues within the areas of property tax and stamp duties. In particular, this Committee is to review the regulations for packaging real estate and is to analyse whether acquisitions executed through the establishment and registration of property companies abuse such regulations with the aim of avoiding stamp duties.
The results of this Committee’s work are to be reported no later than 31 March 2017.
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