Renting out your holiday home can be a great way to cover costs and generate extra income. Below are detailed answers to the questions you should consider:

1. How much should I charge in rent to cover my costs and potentially make a profit?

   To determine an appropriate rent, you should first calculate your total costs for the holiday home, including fixed and variable expenses. You can then research market rental rates for similar properties in the area to set a competitive price that covers your costs and provides your desired profit. Stugknuten offers a platform where you can compare prices for similar cottages to get a sense of the market level.

2. Which fixed and variable costs are associated with renting out (e.g. electricity, water, insurance, cleaning)?

   Fixed costs include:

• Property tax: Annual tax based on the property’s assessed value.

• Insurance: Home and rental insurance that protects against damage and liability.

• Maintenance: Ongoing maintenance to keep the property in good condition.

  Variable costs may include:

• Electricity and water: Usage costs that vary with consumption.

• Cleaning: Costs for cleaning between guests.

• Repairs: Unforeseen expenses to address damage or wear and tear.

  Having a clear overview of these costs helps you set a rent that covers them and creates the opportunity for profit.

3. Do I need to pay tax on the rental income, and which rules apply?

   Yes, income from renting out a private residence is taxable.

   Read more at Skatteverket

4. Do I have financial reserves to handle unexpected repairs or wear and tear?

   Having a financial buffer is crucial to cover unforeseen expenses that may arise during rentals, such as repairs or replacing furnishings. By setting aside part of the rental income into a maintenance fund, you can ensure funds are available when needed. This contributes to a smoother rental process and helps maintain the property’s standard.

   By carefully considering these aspects and planning accordingly, you can build a successful and profitable rental activity for your holiday home.

How much can I earn tax-free from renting out my cottage?

How much you can earn from renting out your cottage without paying tax depends on how the rental is classified under Swedish tax law – as private rental or business activity. Below are the most important rules to be aware of.

1. Private rental (most people renting out a holiday home fall into this category)

   If your cottage is classified as a private residence (for example, a holiday home that you do not rent out as a business), the following rules apply:

• Standard deduction: SEK 40,000 per year and per property

• You are automatically entitled to a deduction of SEK 40,000 per year from your rental income.

• Deduction: 20% of gross rental income

• For detached houses and holiday homes, you may also deduct 20% of the total annual rental income in addition to the standard deduction.

  Example:

  If you rent out your cottage for SEK 100,000 during one year:

  Standard deduction: SEK 40,000

• 20% deduction: SEK 20,000

• Total deductions: SEK 60,000

• Taxable income: SEK 40,000

  The taxable income is taxed as capital income at a rate of 30%.

  Note that you may not deduct actual expenses such as electricity, water, cleaning, repairs, or furniture when renting out privately.
  The deductions are always SEK 40,000 + 20%, nothing else.

2. Business activity

   The rental may be classified as business activity if, for example, you:

• rent out on a very large scale

• rent out multiple cottages

• operate the rental professionally

• offer extensive services, such as cleaning, reception, or activities

  In this case, different rules apply:

• Income is taxed as business income

• You pay municipal tax, state tax (at higher income levels), and social security contributions

• You may deduct actual costs related to the rental

  The classification is based on an overall assessment.

3. VAT

   VAT only applies if the rental is classified as business activity.

• Short-term rental (e.g. weekly rentals to tourists): 25% VAT
• Long-term rental (more than 30 days): usually VAT-exempt
• Private rental is not subject to VAT.

Summary

For private rental of a holiday home:

• SEK 40,000 + 20% of gross rental income is tax-free
• The surplus is taxed at 30%
• Actual costs may not be deducted
• Extensive rental activity may be classified as business activity

As rules and practices may change, we recommend checking the latest details on the Swedish Tax Agency’s website if you are unsure.

Yes, as a host you may use a security deposit when renting out a holiday home. A deposit serves as security in case the guest causes damage to the property or if the cleaning does not meet the agreed standards.

It is common to agree on a deposit that is paid in connection with entering into the rental agreement and refunded after the rental period ends, provided the property is returned in good condition.

It is important to clearly specify the terms of the deposit in the rental agreement, including under which circumstances you are entitled to retain all or part of the deposit. Having a written agreement reduces the risk of misunderstandings between you and the guest.

However, please note that Stugknuten generally does not recommend using a deposit. This is because handling deposits can lead to misunderstandings and disputes if deductions need to be made. If you still choose to use a deposit, this should only be done if you as a host are able to be present at both check-in and check-out to inspect the property together with the guest.

Remember that the deposit must be refunded if the property is returned in the condition agreed upon. To avoid disputes, it may be a good idea to document the condition of the property both before and after the rental period.

If you have further questions you are very welcome to contact us!

Unchanged tax rules for you as a host

Stugknuten is subject to new regulations that require us to report information to the Swedish Tax Agency regarding hosts and bookings carried out via Stugknuten’s booking service.

The new laws, regulations, and amendments to existing legislation came into force on 1 January 2023. For you as a host, the same rules as before apply when it comes to declaring income and paying tax.

Find out if and how you should declare your income at the Swedish Tax Agency.

The information Stugknuten reports for rentals completed through our booking service varies slightly depending on whether the host is a private individual or a company.

For all hosts (private individuals and companies), the following information is reported:

• The rental amount paid out to each host.
• Property designation (apartment number when renting out rental apartments or condominiums, or cottage number when renting out cottages in a holiday village) and the property’s address.

For private individuals, the following information is also reported:

The host’s first name, last name, date of birth, primary address, tax identification number (personal identity number), VAT registration number (sole traders only).

For companies, the following information is also reported:

The company’s full official name including legal form, primary address (registered office), tax identification number (TIN/organisation number), information on each country that issued a tax identification number (if the host has multiple tax identification numbers, all must be reported), VAT registration number if available, foreign company registration number and the type of such number.

What is a tax identification number?

In Sweden, the personal identity number or coordination number is the tax identification number for a natural person. For Swedish legal entities such as limited companies, partnerships, and economic associations, the organisation number serves as the Swedish tax identification number.

DAC7 information

The information is reported annually at the end of January. Once reporting has been completed, you will be able to find your details under: My receipts > Tax statements.

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For more information, we recommend visiting the Swedish Tax Agency’s website.

Income from renting out a cottage can vary depending on factors such as the location, standard, season, and demand. Many of our hosts find that cottage rental is an effective way to increase their income. To get a better understanding of potential earnings, we recommend that you look into what similar cottages in your area are rented out for and how often they are booked.

Keep in mind that income from rentals is taxable. We recommend contacting the Swedish Tax Agency or a tax professional to get up-to-date information on tax rules and any deductions that may apply.

When you rent out your cottage via Stugknuten, we charge a commission fee of 12% of the rental amount. This fee covers our secure booking and payment service, support in case of any issues, and an additional cottage insurance provided through Omocom.

Is the commission tax-free?

The full rental amount, including the commission, constitutes the basis for your rental income. Always check with the Swedish Tax Agency if you are unsure about anything related to taxation of your rental.