Give away a home

Gift tax in Sweden was abolished in 2005. You do not pay a special tax merely because you give the home away.

That applies to both a house and a tenant-owned flat, and whether the recipient is your child or someone else.

The end of gift tax does not remove other fees, or the tax that can arise the day the home is sold.

Always write a deed of gift. It shows who gives, who receives, which home it is and the date of the gift.

Put any conditions in the same document, for example that the home is separate property or that you want to stay on. Both parties sign.

A deed for a house should describe the property so it can be identified, usually with the property designation and the address. For a tenant-owned flat, name the association, the flat number and the address.

The deed is needed for registration of title, or so the board can consider membership. Without it, the next step becomes unnecessarily difficult.

When a house or other real property changes owner, the new owner applies for registration of title with Lantmäteriet. The deed of gift is the document you enclose.

A pure gift pays no stamp duty. You pay only the fixed processing fee.

A pure gift means the recipient pays nothing and does not take over your loan. As soon as money or a loan is included, the picture changes.

Keep in mind. If the recipient takes over a loan or pays for part of the home, it becomes a mixed gift. Stamp duty can then be charged on the part that is not a gift, and a sale can trigger capital gains tax for the giver.

A tenant-owned flat is a share in the association and the right to live in the flat. It can be given away, but the board must approve the recipient as a member.

That also applies when you give the flat to a child. The board considers membership under the statutes and may refuse if there are objective grounds.

Before you sign, read the statutes and ask the association what they want to see, such as the deed of gift and details about the recipient.

If membership is not approved, the gift cannot be completed as you planned. Allow time for that before you promise the flat away.

Keep in mind. The board’s yes is a condition, not a formality. Ask the association early.

The gift itself does not trigger capital gains tax. The tax comes when the recipient later sells the home.

The recipient takes over your acquisition cost, meaning what you once paid plus amounts that may be added in the capital gain calculation. Any deferral of tax follows as well.

A large rise in value can therefore become the recipient’s tax on the day they sell, even if they received the home for free.

Keep purchase documents, records of improvement costs and any deferral decision, and hand them over with the gift.

A mortgage sits with a person, not with the house itself. If the recipient is to take over the loan, the bank must approve it.

The bank makes an ordinary credit check. It looks at income, other debts and the value of the home, even when a child is the recipient.

If the bank says no, you cannot move the loan. You then repay it, leave it with the giver, or drop the gift in that form.

Do not hand over the keys before the bank has agreed. A verbal promise is not enough.

The deed can steer what happens to the home afterwards. Three conditions are common, and they should be written clearly.

Separate property means the home is kept out of a division of property if the recipient divorces. The condition protects the gift against the recipient’s partner. It does not shield the home from every debt of the recipient.

A ban on sale or pledging means the recipient cannot dispose of the home or mortgage it without your consent, for as long as the condition lasts.

A reserved right of use means you, as the giver, may stay on, on the terms you write. Be clear about how long, whether you pay anything, and who covers running costs.

Keep in mind. Vague conditions are hard to use on the day you need them. Write what applies, not only a heading.

A gift to a child counts as an advance on inheritance unless the deed says otherwise. The value is then deducted when the estate is later divided.

That affects siblings. A child who has already received the home may receive less, or nothing, when the estate is distributed, so that the siblings end up equal.

The reserved portion sets a limit. Children are entitled to a certain share, and large gifts close to a death can in some cases be reclaimed if that share is infringed.

Write expressly what applies: that the gift is an advance, or that it should not be deducted. Talk to your children if you can. Unwritten assumptions often become a conflict.

Keep in mind. Silence means an advance on inheritance when the recipient is your child. If you want something else, it must be in the deed.

Spouses may give each other a home, but the gift is not effective against the giver’s creditors until the deed is registered with the Swedish Tax Agency.

Registration is not a formality you can skip. Without it, a creditor can in some cases disregard the gift.

The Tax Agency accepts the deed for registration. Both of you should have signed, and the home must be identifiable.

A gift between spouses can also affect a later division of property. Separate property must then be stated in the deed.

Keep in mind. A deed of gift between spouses must be registered with the Swedish Tax Agency to apply against the giver’s creditors.

A child under 18 can receive a gift, but cannot freely control everything. A guardian acts for the child.

If the gift includes conditions, or a loan follows, the chief guardian may need to approve the step. That is especially true if the child is to take over debt or if the home is to be mortgaged.

Contact the chief guardian in the municipality before you sign, so you know which consents are required.

Allow time. A refusal means the arrangement has to be redone.

When the owner changes, the insurance must follow. Change the policyholder, or take out a new house or tenant-owner policy in the recipient’s name, from the day the gift takes effect.

A gap without insurance is an unnecessary risk. Contact the insurer before the handover, not the week after.

No estate agent is needed for a gift. You can complete it yourselves with a deed, the bank, the association or Lantmäteriet.

If you want help with wording or with a mixed gift, talk to a lawyer, not to an agent who is there to sell the home.