The only existing form of complete and absolute ownership in Sweden is the freehold. A property may also be held by site-leasehold (tomträtt), a form of leasehold. A site-leasehold may only be granted for property owned by the state, a municipality or other public body. Site-leaseholds are granted for an indefinite period of time and may only be terminated in very specific situations. In return, the site-leaseholder pays a fixed annual fee which can only be renegotiated every 10 years or more. A site-leaseholder is therefore considered to be in a similar legal position to an owner of the property. Site-leaseholds may be transferred and the holder can also raise mortgages assignable to the property.
Last modified 13 Mar 2025
There are no restrictions other than those that apply to national investors.
Under the FDI Act, all investors, i.e. third country investors, investors from EU member states, and investors from Sweden are covered by the screening mechanism. Provided that the investment and activities are deemed as protected activities, such investments in eg real estate must be notified to the authority, and approval from the authority must be obtained prior to closing the investment.
Last modified 13 Mar 2025
Due to legislative changes, pre-emption rights for municipalities do not apply as of 1 May 2010.
Last modified 13 Mar 2025
The transfer of title to real estate is generally governed by the Real Property Code (Jordabalken).
Last modified 13 Mar 2025
Due to legislative changes, specific rights of pre-emption and approval do not apply as of 1 May 2010.
It should also be noted, however, that a co-operative building society may have a right of pre-emption over certain real estate. A tenant of land may also have a right of pre-emption if the tenancy is in the form of a residential ground lease or certain types of agricultural ground lease.
Regarding FDI, it is essential to evaluate and assess the business activities of the involved parties. For instance, investments in real estate that are engaged in essential societal functions, eg critical infrastructure, may be subject to the screening mechanism and necessitate notification to the authority.
Last modified 13 Mar 2025
A buyer of real estate must file an application for registration of ownership with the Land Survey Authority within three months of the purchase in order to obtain a certificate of registration of title. The sale and purchase agreement or the bill of sale must be attached to the application. The buyer is considered to be the rightful owner of the real estate as soon as the transfer is registered.
Last modified 13 Mar 2025
All real estate in Sweden is registered in the Real Property Register. From 1 July 2008 the registration section of the Real Property Register (Real Property Registration Register) has been kept by the Land Survey Authority (previously it was kept by the Land Registration Authority). The authority is responsible for maintaining the Swedish land register, which includes details of past and present owners, registered mortgages, tax values, easements etc.
Yes, the buyer must file an application for registration of ownership with the Land Survey Authority within three months of the purchase in order to obtain a certificate of registration of title. The sale and purchase agreement or the bill of sale must be attached to the application. The buyer is considered to be the rightful owner of the real estate as soon as the transfer is registered.
It is also possible to apply to the Land Registration Authority to register mortgages and certain other property rights.
No.
Last modified 13 Mar 2025
Investments in commercial real estate in Sweden are made either as direct investments/asset deals or as indirect investments/share deals, where the real estate is the asset of a limited liability company, or a trading or limited partnership. Due to Swedish tax regulations, most sellers prefer to sell shares in limited liability companies. The buyer generally carries out due diligence before the acquisition, typically after signing a letter of intent or similar agreement providing them with a period of exclusivity. Bidding contests are also frequent, with several potential buyers carrying out limited investigations of the company or of the real estate before submitting their bids. Both the buyer and seller are normally assisted by professional legal, financial, commercial and technical advisors.
The conclusion of the share purchase agreement (or the sale and purchase agreement) is often subject to the outcome of the buyer's due diligence. The extent of the due diligence depends on the buyer and the real estate in question. However, technical and legal due diligence is normally conducted in relation to title, building permits, leases and other contracts relating to the real estate.
In case of a direct transfer of real estate (asset deal), no notarization or similar requirements are necessary under Swedish law to complete the transfer. The buyer becomes the recognized owner according to civil law once the terms and conditions of the transaction set out in the sale and purchase agreement are met, although the buyer must also apply to the Land Survey Authority to register legal title to the real estate. This triggers a transfer tax of 4.25 percent (for legal entities) of the transfer price or tax assessment value of the real estate, whichever is higher. In the case of the transfer of shares in a corporate entity no new registration is necessary and therefore no transfer tax is payable.
Last modified 13 Mar 2025
Buyers generally carry out due diligence prior to acquisition, typically after signing a letter of intent or similar agreement providing exclusivity for a limited period of time. Bidding contests are also frequent, with several potential buyers carrying out limited investigations of a company or real estate before submitting their bids. Both the buyer and the seller are normally assisted by professional legal, financial, commercial and technical advisors.
The due diligence process for different types of investment is normally very similar in relation to the real estate itself. However, in the case of share deals additional due diligence must be carried out concerning corporate, tax, employment, insurance, disputes and other historical matters as is usual with the acquisition of any company.
It is worth noting that in Sweden information is more easily accessible via the official records than might normally be expected in Central and Eastern Europe. For example, all real estate is registered in the Swedish Real Property Register kept by the Swedish Land Survey Authority. The Real Property Register contains details of, among other things, owners (present and former), mortgages, tax values, easements etc. It is also possible to obtain information about the purchase price paid by the present and former owners of the real estate. The easy accessibility of such information facilitates a secure, reliable, timely and cost-efficient due diligence process.
Last modified 13 Mar 2025
Yes, the seller's spouse must consent to the sale if the real estate in question is the spouse's normal residence or is marital property.
It should also be noted that a co-operative building society may have a right of pre-emption over certain real estate. A tenant of land may also have a right of pre-emption if the tenancy is in the form of a residential ground lease or certain types of agricultural ground lease.
Last modified 13 Mar 2025
Yes, there are some formal requirements for the structure of the sale and purchase agreement. According to the Real Property Code, the sale and purchase agreement and/or the bill of sale must contain information regarding the real property designation of the real estate, a declaration by the seller regarding its transfer to the buyer, and the purchase price paid by the buyer. The seller and the buyer must sign the sale and purchase agreement and the bill of sale. The seller's signature must also be witnessed by two other people.
The content of the sale and purchase agreement is subject to negotiation and the parties are free to agree upon guarantees etc, for example in respect of the seller's liability for defects. However, essential elements include the identity of the parties; the identity of the real estate and its official designation; the seller's declaration regarding the transfer; the date when the buyer will assume title and ownership; the purchase price and how payment is going to be made, including details of any down payments; insurance; conditions relating to the sharing of risks and benefits; the seller's representations and warranties; and approval from the relevant rent tribunal or County Administrative Board (Länsstyrelsen) where applicable.
In the absence of any specific agreement between the parties concerning the condition of the real estate, the seller may be liable to compensate the buyer (by means of a reduction in the purchase price) if the condition of the property proves to be different from what the buyer might reasonably have foreseen. In some cases the buyer may be entitled to annul the purchase agreement. However, under Swedish law a buyer of real estate has a far-reaching obligation to examine property prior to purchase. This is very important since a buyer may not claim compensation (a reduction in the purchase price) if they ought to have detected the defects when examining the real estate.
Claims must be made by the buyer within a 'reasonable time' of detecting any defects or of the date it is deemed that the buyer ought to have detected the defects. Claims relating to the purchase of real estate are ultimately subject to a limitation period of 10 years. In the case of commercial transactions it is common for the parties to agree to limit the seller's liability for defects.
Last modified 13 Mar 2025
If the real estate differs from what has been agreed between the parties, or from what the buyer could reasonably have expected under the circumstances, then the buyer may be entitled to a reduction in the purchase price or to terminate the agreement. However, the buyer cannot make a claim if he ought to have detected the defects when examining the property prior to the completion of the contract. In the case of commercial transactions it is common for the parties to agree to limit the seller's liability for defects.
Warranties may be excluded in writing.
Claims must be made by the buyer within a 'reasonable time' of detecting any defects or of the date it is deemed that the buyer ought to have detected the defects. Claims relating to the purchase of real estate are ultimately subject to a limitation period of 10 years. In the case of commercial transactions it is common for the parties to agree to limit the seller's liability for defects.
Last modified 13 Mar 2025
These include a reduction of the purchase price, the payment of damages and/or the annulment of the sale and purchase agreement. However, in the case of commercial transactions it is common for the parties to agree to limit the buyer's remedies.
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The following areas should be investigated by a buyer:
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Yes, under the Environmental Act a buyer may be held responsible for soil pollution or contamination, despite its primary provision that the person who originally caused the contamination and soil pollution is liable for the damages.
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According to the Planning and Building Act (Plan-och Bygglagen), a zoning plan may be modified or annulled. However, if the owner opposes this, the zoning plan can only be modified or annulled where there are new circumstances of great significance to the community, which could not have been anticipated when it was originally adopted, and which cannot be accommodated in any other way. The owner is also entitled to full compensation for any damages if the municipality decides to modify or annul the zoning plan.
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Yes, the parties may enter into a development agreement, with the private developer undertaking to meet certain costs relating to the development.
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Yes, expropriation of real estate is possible with the government's permission. Compensation equal to the property's current market value plus 25% is normally payable, however when this is determined, any potential future increase in value due to any proposed development is not taken into consideration.
Last modified 13 Mar 2025
Transfer tax (stamp duty) is normally payable on the transfer (actual or deemed) of real estate. This is calculated at 4.25 percent (for legal entities) or 1.5 percent (for individuals) of the transfer value or the tax assessment value of the real estate, whichever is higher. Certain exemptions to the transfer tax apply. Transfer tax is normally paid by the buyer.
A subsequent transfer of real estate on the same terms and conditions as the initial transfer will not trigger transfer tax if it is made within three months of the initial transfer.
Other costs may include legal and financial advice, and estate agency fees. Estate agents normally work on a commission basis which generally varies between 0.5 percent and 5 percent of the agreed purchase price, depending on the type of real estate and the size of transaction. The seller normally pays the estate agent. Other costs are generally met by the buyer.
Last modified 13 Mar 2025
No transfer tax is payable on the transfer of shares. Other costs may include legal and financial advice, and estate agency fees. Estate agents normally work on a commission basis which generally varies between 0.5 percent and 5 percent of the agreed purchase price, depending on the type of real estate and the size of transaction. The seller normally pays the estate agent. Other costs are generally met by the buyer.
Last modified 13 Mar 2025
Are there any legal restrictions on foreign investors acquiring real estate?
There are no restrictions other than those that apply to national investors.
Under the FDI Act, all investors, i.e. third country investors, investors from EU member states, and investors from Sweden are covered by the screening mechanism. Provided that the investment and activities are deemed as protected activities, such investments in eg real estate must be notified to the authority, and approval from the authority must be obtained prior to closing the investment.
Last modified 13 Mar 2025