Avoid Tax Pitfalls with AirBnB Income in Sweden: Key Considerations for International Property Owners

Given the stalled real estate market in Sweden, which has largely been caused by higher interest rates and inflation, there have been, in some cases, good opportunities to acquire properties in Sweden at a good price. Additionally, the Swedish krona has been exceptionally cheap, especially in relation to larger currencies such as USD, GBP, and EUR, which has led to an increased number of foreign buyers purchasing properties in Sweden.

As a foreign owner of a property in Sweden, it might be a good idea to rent it out through platforms like AirBnB. But what are the tax implications?

How is AirBnB Rental Taxed in Sweden?

As a general rule, rental income from a property in Sweden is subject to Swedish capital tax, which is 30%. However, for the property to be taxed under capital tax, it must be classified as a "private residence" for tax purposes. To be classified as a private residence, it is required, in simplified terms, that the owner or the owner's close relatives either use the property privately or intend to use it privately in the foreseeable future.

When taxed under capital tax, unfortunately, deductions cannot be made for rental expenses such as electricity, water, or similar costs. Instead, certain standardized deductions may apply. In cases where the property owner has not had significant costs related to the rental, this can be advantageous. But in other cases, where the owner may have had substantial costs related to the rental, there is a risk of losing out on deductions.

If the rented property is not classified as a private residence, it is instead considered a "business property," which means that essentially the same tax rules as those applied to sole traders are used. This implies that the income is subject to business taxation, which, for Swedish purposes, means that it is taxed at progressive rates (approximately 29% – 53% tax).

There is also a high risk that you will be required to pay Swedish employer contributions on the rental surplus. These contributions are very high by international standards. A distinction is made based on whether your business is considered "active" or "passive."

Am I Also Taxed in My Home Country if I Do Not Reside in Sweden?

This is an important question for international individuals who have purchased a property in Sweden for investment purposes. In fact, such individuals are, in most cases, subject to a tax claim from their home country. Since Sweden also wishes to collect tax, as Sweden taxes all income connected to a property located in Sweden, there is a high risk that both Sweden and the other country will want to impose taxes.

To avoid this, a tax treaty that Sweden has entered into may apply. However, note that Sweden has not signed tax treaties with all countries, although Sweden’s network of tax treaties is relatively extensive.

To understand the consequences of the tax treaty, the owner’s residency under the treaty must be assessed. Then, both the allocation and method articles in the treaty must be studied.

Is AirBnB Rental Subject to Swedish Social Security Contributions?

As a general rule, no social security contributions should apply if the rental property is classified as a private residence. If, instead, the rental is considered a business activity, then, as a general rule, Swedish social security contributions should apply.

However, it should be noted that the EU’s social security regulation could mean that Sweden is not entitled to collect such contributions. An individual analysis must be made to answer this question.

Is AirBnB Rental Subject to Swedish VAT?

As a general rule, property rental is not subject to Swedish VAT. However, exceptions apply to short-term rentals of residences. There is thus a significant risk that AirBnB rental will be subject to VAT if it occurs within the framework of a taxable business.

Since 2025, certain thresholds have been raised in Sweden regarding VAT, which may mean that landlords whose income is below this threshold may not need to pay VAT. However, in some cases, VAT liability can be advantageous, as input VAT can then be deducted.

A VAT-related analysis must be conducted to answer this question. If VAT liability applies, the individual must register for VAT in Sweden, submit VAT reports, and pay VAT to the Swedish tax authorities.

AirBnB's Reporting to the Swedish Tax Agency

Under the EU's DAC7 directive, since 2023, platforms like AirBnB are required to report the income earned by hosts to the Swedish Tax Agency (Skatteverket). This means that Swedish tax authorities will have access to data regarding the rental income you earn, even if you do not actively report it yourself.

It is crucial to handle your tax matters correctly, as failure to comply with these regulations can lead to significant consequences. Incorrect or incomplete reporting could result in tax penalties, fines, interest charges, or other sanctions. Therefore, ensuring your AirBnB rental income is accurately reported and taxed in accordance with Swedish tax laws is essential to avoid any unpleasant surprises.

Do I Need to File a Tax Return in Sweden if I Rent Out My Property via AirBnB?

Yes, you must as a main rule. Sweden wants to tax AirBnB rentals of properties or residences located in Sweden. Therefore, regardless of whether you are considered a "tax resident" in Sweden, you must file a tax return in Sweden that includes a correct reporting of your taxable income from AirBnB rental.

This can, of course, be difficult for someone who does not speak Swedish. We are here to help in such cases. Do not hesitate to contact us if you own or are considering purchasing a property in Sweden that you want to rent out via platforms such as AirBnB.

For more information on how capital gains on real estate are taxed in Sweden, check out our detailed guide on capital gains tax in Sweden.