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Investment

Investment climate

What is the general climate of real estate investment in your jurisdiction?

The climate for real estate investments in Sweden is generally considered to be good. The market is highly competitive and transparent, and the price levels have increased at an even rate since the financial crisis of 2008. The year 2016 saw new record levels of real estate transactions.

Investors

Who are the most common investors in real estate?

At present, the largest investors in real estate are well-established real estate companies with a long history of investing in real estate, together with pension funds (both private and buffer funds within the Swedish pension system). Recent years have seen an increasing interest from small and mid-sized private investors. Foreign investors have also returned to the market (eg, Blackstone).

Are there any restrictions on foreign investment in real estate?

No, there are no restrictions on foreign investment in real estate.

Investment structures

What structures are typically used to invest in real estate and what are the advantages and disadvantages of each (including tax implications)?

Real estate transactions in Sweden are usually carried out as share transactions. This is mainly because a corporate seller can realise a tax-exempt capital gain on the sale of shares, whereas a gain on a direct sale of real estate is subject to corporate tax. The corporate tax rate is 22%. In addition, in contrast to a direct sale of real estate, there is no stamp duty on a share transaction, which is its main advantage. However, the results of an ongoing investigation are due on March 31 2017 which may lead to altered tax rules on investment structures.

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