Renting Out Your Housing Cooperative Apartment in the Second Hand: Rules and Taxes

Considering the possibility to rent out housing cooperative second hand can be an appealing idea, whether due to a temporary move, a stay abroad, or the chance to earn extra income. However, before diving into the process, it's crucial to understand the rules and obligations that apply. Renting out your housing cooperative apartment without proper permission or in violation of the association's statutes can lead to problems, and there are specific tax regulations to navigate. This comprehensive guide provides you with all the information you need to rent out housing cooperative second hand correctly and safely.

Permission from the Housing Cooperative Association: The Foundation for Successful Rental

The very first step before even considering renting out your housing cooperative apartment in the second hand is to obtain the necessary permission from your housing cooperative association. Since 2014, it has been legally mandated that all housing cooperative associations must allow the rental of cooperative apartments in the second hand under certain conditions. However, the association has the right to deny a rental if there are grounds for it, for example, if the tenant is not deemed suitable or if the rental violates the association's purpose or statutes.

The Application Process

The application for a second-hand rental is typically made in writing to the board. In the application, you need to specify who will rent the apartment, for what period, and why you wish to rent it out. The association then has the right to charge a fee for the second-hand rental, which however cannot exceed 10% of the price base amount per year. It is important that you receive written approval from the association before the rental begins.

Common Reasons for Rejection

Even though the law generally permits rentals, the association can deny if they believe that:

• The tenant is not suitable (e.g., payment remarks).
• The rental would cause a nuisance to neighbors.
• The property is to be used for commercial purposes.
• The rental violates the association's statutes or purpose.

If you receive a rejection and believe it to be unfounded, you can turn to the Rent Tribunal (Hyresnämnden) for a review.

Tax Rules for Renting Out a Housing Cooperative Apartment in the Second Hand

When you rent out your housing cooperative apartment in the second hand, it's important to understand how taxation works. The income from the rental must be declared, and how it is taxed depends on whether you rent it out furnished or unfurnished, and whether you have your own residence or not.

Standard Deduction and Interest Deduction

For individuals renting out their permanent residence, there is an option to make a standard deduction. This deduction is intended to cover costs for wear and tear and maintenance. For the year 2023, the standard deduction is SEK 40,000 per year. If the rental income exceeds SEK 40,000, the difference is taxed at 30%. If you are renting out a housing cooperative apartment that you yourself live in, you can also deduct interest on your housing loan up to a certain amount.

Rental of a Holiday Home

If you rent out a holiday home (e.g., a summer cottage), different rules apply. In that case, the entire rental income is taxed, but with the possibility of a more generous deduction (25% of the rental income) to cover costs.

Declaration

All rental income must be reported in your income tax return under "