Taxes
The taxes of a property are established via a periodical real estate assessment; the assessment is done periodically in order to reflect the prices changes in that market. A national property tax is charged to private dwellings, residential buildings and farms as well as rented residential or business. The real estate tax is calculated on the basis of the assessed taxable value. An incentive that has been put in place to help promote the construction of new homes comes in the form of a tax break. If a residential building or any part of that residential building has been constructed from 1991 or later is not taxed for the first file years and after the first five years the tax rate is deducted by 50% a year for the next five years. Living area in residential units and homes are taxed at a rate of 1.2% of the taxable value and at 1% for floor space that is used other than for living like for a garage. The assessed value of a property is about 75% of the market value. When selling a home if you sell the home in May, you only have to pay taxes for January through May and then the purchaser of the home would pay for the remaining of the year. When it comes to the payment of taxes the taxing authorities administer an account to everyone that has to pay taxes and the taxes are paid monthly. If the estimated taxes that have been paid monthly end up being more or less than the actual tax amount a refund will be given or a bill in the amount that is owed. The national income tax is 20% with a local tax ranging from 26-35%, and capital gain tax at 30%. When a private residence is sold half of the sum of the capital gain is taxable. It is possible to defer payment of capital gain if the seller purchases an equivalent property within one year of the sale. When talking about commercial properties the capital gain can be taxed at 90% and if the income from the sale of the assets exceeds SEK 50,000 they can also be taxed (7).
There are three categories for taxable income in Sweden; the first is income from employment, then income from capital and investment, and profits from a business. When thinking of rental income it is considered to be income from capital and is taxed at a flat rate of 30% for residents and also non residence. When a property is leased, the cost that are incurred from the lease are not deductable, instead of allowing for deductions on the cost of the lease, they have a general deduction of € 435 per property is allowed and also an additional 20% is deducted off the annual rental income. When business is taxed from rental income it is considered business income and is taxed at a rate of 25%, and they also have to pay a national tax “see exhibit 6”(25).
Net wealth taxes are levied at the rate of 1.5% of the net wealth of a household, with a tax threshold of SEK1.5 million (€163,049) for a single person and SEK3 million (€326,098) for married couples who are filing jointly. Net wealth tax would be reduced if the combined wealth and income taxes exceed 60 percent of the total taxable income (25).
Government Powers
The Land Code is the most important statute that governs real estate; the major areas covered by this statute are buying and selling of properties, easements and mortgages, and the rights of use in real property. The Planning and Building Act regulates the use of land and buildings and the Property Unit Act which deals with the formation of and changes in real estate units. In Sweden the municipalities are all independent and they draw up there own layout plan. The detailed developmental plan contains all the plans for specific regions and all the construction of the new buildings, when a new plan gets approved it is then placed on the detailed developmental plan (8). In Sweden before you construct a new building a permit must be obtained from the municipality, just like in the US when you want to add an addition or build a new building you need to get permits, this is a way for the government to make sure that the work has been done in a good manor and by a licensed professional, even if reconstructing an existing building. When a building permit is taken out on a property, that permit stays with the property and is also valid for future owners. Once all the work specified by the permit has been done the municipality needs to be contacted so they can have someone go and check out the quality of the work and once everything is fine the municipality issues a certificate of compliance. If you want to appeal a decision that has been made by a municipality you can always go to a court of law to try and settle the dispute and in some cases you can appeal it to the Government. All zoning restrictions for a particular property are available for review through public records and should be reviewed before purchasing a property, even thought the seller is obligated to disclose any information regarding zoning and any restrictions. To obtain a permit you have to pay a small fee and they vary for all municipalities. The timing to obtain a permit varies depending if the permit is used to reconstruct an existing building or to construct a totally new one, between three months and two years and this also depends if there are any appeals which could make the process even longer. All the requirements for permits can be obtained in the Planning and Building Act (9).
Land Registration
The registration system has been in the works since the 1970’s and was finally completed in 1995. Now land is registered in a computerized system which has been open to the public since 1996, and for a small fee anyone can obtain information from the system. The registration system is divided into 7 geographical districts that input all the information dealing with property transactions. The 7 authorities were drastically reduced in 2001 from 89. All the registration takes place in the land registry with the purpose of giving publicity and legal protection for all purchases and to establish certainty of ownership which all helps to promote the buying and selling of houses. The land registration has a controlling body that deals with running and maintaining the system called Lantmateriet. Land registry consist of title, site leasehold grant, site leasehold right, encumbrances such as mortgages and rights of use, official notifications and history (10).
Title/Deeds
In order for a mortgage deed to be valid it has to have the following information included: The seller and buyer, the price, the real property to be conveyed, and the intent to convey. If this information is not included in the deed it will be voided. There are different types of ownership in Sweden the first we will talk about is Direct Ownership, which has both co-ownership and sole ownership of land. When speaking of ownership we are speaking about the land and all the buildings on the land including all fixtures. Another form of ownership is Site Leasehold (tomtratt) which is created through the municipality, it is a site leasehold agreement for an annual fee, and all buildings belong to the site leaseholder, and the leaseholder can only transfer the leasehold not the land. Lease (hyra) is a form of ownership for a period of time, which gives the right to occupy the whole or part of a building. The landlord grants the lease, who is the owner of the property to a tenant for payment. Land leasehold (arrende) is an agreement between a lessor who grants the lease to a lessee the right to use the land in return for payment. Easement (servitut) is the right to use a facility, building or road, which can only be created if it is deemed necessary and the easement promotes and appropriate use of the land and can be created by two property owners. Easements can also be created by expropriate measures and also by the Real Property Formation Act. Another type of easement is a utility easement (ledningsratt) and a public road easement (vagratt) which are specific for utility companies (9).
When it comes to title, the Land Registration Authorities are in charge of the applications and also the registrations. Title to real estate is evident by registration (lagfart) and is state guaranteed. The way in which the state guarantees title is that if a loss is suffered by wrong information on title by anyone, the government will be liable to pay compensation in the amount that was lost. Since the government is strong about the information that is entered into the Land Registration, they will compensate for any damages, which is the reason that there is no such thing as title insurance in Sweden. After a home is purchased the home owner has a maximum of three months to register for title. If the title is not registered within the three months allowed the Land Registration Authority has the ability to pose a fine on the homeowner. When applying a conveyance tax will be assessed of 1.5% of the taxable value and be paid at the registration of ownership. The registration of ownership fee is 825 SEK and the registration of mortgages and interest fee is 375 SEK. The application of title consist of the original deed of sale, a personal identity number and the name and domicile of the applicant, the telephone number and the legal representation of the attorney and also the address of the property. The application needs to be signed by either the person who drew up the application or by the applicant and has to be written. The applicant can also be rejected by the Land Registration Authority if the applicant does not meet all legal requirements. You can not apply for title on only part of a property it has to be the entire property or it can be several properties as long as they are under the same applicant and under the same registration authority. When applying for a mortgage the borrower has to have a registered title in order to get funding, just like in the US the borrower has to be on title in order to obtain a mortgage (11).
Leases and Contracts
In Sweden the amount charged for rent is linked with the consumer price index with mandatory regulations which are stipulated from the Land Code in favor of the tenant. Leases are entered into for a term of three to five years, with a standard contract that is familiar resulting in shorter times for negotiating and thus lower legal fees (12). Residential leases are normally entered into for an indefinite period of time, but a three-month notice period has to be given before termination. The Land Code also has provisions that are in favor of the tenant, and prices cannot significantly exceed the rents that are set by the municipality housing companies. Purchase contracts require a 10% down payment and the remaining balance will be owed at closing. Currently no legal frame work exist for REIT’s(9).
When it comes to the leasing of buildings in Sweden the typical term is from three to five years, but longer leases are becoming more and more popular. The lengths of leases are limited to 25 years in urban areas and 50 years in rural areas. If the lease is for three years or longer there is the possibility to increase the rents if the parties involved agreed upon this while negotiation took place. The only way to sub-lease a property is if you have consent from the landlord, you do not need consent if you only sub-lease a portion of the property. The tenant needs to maintain the property in an “as is” condition from when the property was leased (21).
Financing and the Secondary Market
In Sweden mortgage loans are provided by mortgage credit institutions, which provide credit for mainly residential properties, but they will also provide credit to municipalities and also commercial and office buildings. The way the bank securitizes the loan is that it has the property for collateral incase the borrower defaults on payments and then the bank needs to foreclose and sell the property in order to get payment for the loan. When considering a first mortgage the banks will normally lend out 70 – 80 % loan to value, if the borrower needs additional money they can get a second mortgage from the original bank who issued the first loan or by a bank that co-operates with the original. The two largest credit institutions, which are Stadshypotek and Spintab, are own both by Handelsbanken and ForeningsSparbanken, they account for majority of the lending. They offer loans with fixed rates and have a maximum maturity of 20 years. When you have a mortgage that is based in Sweden they add a 2% tax. The amount that the lender will lend all depends on earnings and not any other source of income, for example a tenant that also receives income from rentals cannot get a mortgage based on the rentals. In Sweden the lenders get financing for the loans that they make by the sale of bonds and commercial papers in the open market (13). When funding in Europe they have three main sources that are used for funding. The first is retail deposits, which accounts for 2/3 of the mortgages in Europe which are funded through deposits. The problem with this is that deposits are normally short term liabilities while mortgages are long term. Another method of funding is covered bonds, which are dept instruments that are secured over a pool of loans which use the property as a form of collateral, and account for about 15-20% of the loans. The third form is mortgage back securities, which are debt securities that are issued off a balance sheet, so in other words means that the loans are transferred away from the bank, and are put in SPV (special purpose vehicles) which in return issues securities. A lot of benefits can come from a secondary market, the main benefit would be that it increases liquidity which in turn provides more available funding and can also lower the interest rates and allows more people the ability to get mortgages. In order to have a well developed secondary market the banks are going to have to encourage a standardization of contract terms and conditions so this would help facilitate an integrated mortgage market which would allow banks to get exposure in different types of markets without having to originate the loans in those markets (14).
The Sales Person & Broker
Licensing, Roles, Responsibilities, Marketing, Compensation
Not everyone in Sweden can wake up in the morning and decide to actively sell real estate. Somewhat like common practice in the USA, in order to practice real estate in Sweden, you must to be licensed and pay an annual fee (in the USA, your fee is paid biannually). Those wanting to enter the real estate industry must undertake a minimum of two years of University coursework in order to become a licensed real estate agent in Sweden.
FASTIGHETSMÄKLARNÄMNDEN (the Board of national real estate agents) believes that this education gives agents thorough knowledge about a wide array of subjects including: economics, tax/accounting, real estate law, property evaluation, contracts, and property arrangements. This knowledge is used to perform the everyday tasks of a real estate agent (described herein below) at an acceptable real estate agent standard. After the education requirement is fulfilled, an examination based on the coursework must be passed to qualify for the license. Apart from the education requirement you have to be over 18 years of age and have a solid financial situation as well as take out liability insurance before starting to work as a licensed real estate agent (15). In Sweden, there is a special Estate Agents’ Act, governing the real estate agent’s profession, both as to the right to pursue agency activities and as to the estate agents’ obligations, responsibility and rights. A person working as a real estate agent must be registered with a special government authority and the prerequisites for the registration are evident from the Estate Agents’ Act (16).
When a property owner decided that they would like to sell their property, be it a home or condo, they usually make an appointment with a local real estate broker or real estate sales associate. This initial meeting between the seller and the realtor will take place in the home of the seller. During this meeting, the real estate agent will provide the seller with a potential marketing plan and then explain to the sellers that they are expected to provide the agent with copies of all documents pertaining to the property/condo including but not limited to: interior and exterior plans, information about loans, mortgage information, easements, operational expenses, surveys, etc. Once the agent reviews all this information, and the real estate agent is ready to proceed with taking this listing, the sellers must sign an agreement with that agent. The most common agreement in Sweden, much like common practices in the USA is the exclusive right to sell agreement. In order for the agreement to be enforceable, the agreement needs to be in writing and it must clearly state the agent’s compensation and the length of the agreement. WorldProperties.com, states that “the seller is not legally committed by a promise to sell even if it is in writing, and may change his/her mind at any time before the written agreement of purchase has been signed” (15).
The real estate agent/brokers in Sweden, much like real estate agents in the United States, have several responsibilities and requirements that they follow when listing a new property for sale. The real estate broker/sales associate will either represent the buyer or seller in any given transaction. In Sweden a real estate agent is considered to be an individual and not a company. Unlike in the US where the broker holds all responsibility, in Sweden, each agent holds a personal right and responsibility to perform his/her business as a real estate agent. WorldProperties.com states, that there are no other professions involved in a normal property transaction in Sweden. Lawyers do not sell properties. Although there are no other parties selling real estate, The Swedish enforcement service is in fact selling properties and condos when the owner has filed for bankruptcy and the money from the object will used to pay off bad debts (15). When it comes to rentals, real estate agents in Sweden are rarely used for rental properties. If the real estate agent is employed by the seller of a property, the agent’s primary obligation is consequently to try to get the best price for the seller which employed him, but otherwise, with regard to advice or information about the property, the agent has a damages-sanctioned responsibility towards the potential buyer of a property. When it comes to drawing-up of transfer agreements, the real estate agent shall watch for the interests of both buyer and seller and formulate the transfer agreement in a way enabling both parties to understand it (16).
Exhibit 1 shows the responsibilities of all parties involved in the sales transaction in Sweden. For instance, basically the real estate agent is in charge of advertising the property, the pre-contract stage, and the contract stage. The seller of a property in Sweden is in participates in the pre-contract and contract stages. The buyers of a home/condo in Sweden participate in the pre-contract and contract stages and buyers interact with bank when obtaining financing in the mortgage stage. Home inspectors are generally used in the pre-contract stage prior to a contract being executed. It is not contractual to perform a complete property inspection but it is fairly common for buyers to hire independent surveyors prior to executing their contracts. In regards to the role of realtors, their service to sellers include establishing a marketing plan for the home/condo, actively market and show the property to perspective buyers, establish housing cost estimates, negotiate the purchase agreement, mediate in creating the agreement in accordance to the Swedish law so that the contract is legal, binging, and enforceable, inform the buyers and sellers about the terms of the contract, have the contract executed, establish the deed of transfer, acquire and review documents for closing such as: new mortgage deeds, letter of certificate, evidence of assessed value, and the information pertaining to the interest rate status, set up loan bonds, obtain documents of transfer from the mortgage loan institutes, establish final documents including: bill of sale, payment deduction and work out correct assignment of the property with complete documentation, and register and file the title.
Real estate agents can market their properties in a variety of different ways. Much like practices in the USA, it is common for agents to place “For Sale” signage in front of properties, in their windows, and in newspapers. The majority of real estate agents also market their properties extensively on the World Wide Web. WorldProperties.com says that basically the property market is greatly varied in Sweden and thus affects marketing strategies in several different directions. Apart from three biggest cities in Sweden which forms a triangle between Stockholm, Gothenburg, and Malmo Sweden there are some cities that lie within this triangle and some areas very densely populated. The competition is large in these cities and these agents have to market themselves harder than the ones in more sparsely populated areas. In smaller towns and villages, real estate agents tend to market themselves by word of mouth, and there are some instances in these small towns where real estate agents are not using the internet at all to market their properties (15).”
FASTIGHETSMÄKLARNÄMNDEN does not regulate where the property can be marketed and a real estate agent can basically market the property anywhere throughout the country. The board is responsible for enforcing agents to abide to the standard rules and common practices. Board members of FASTIGHETSMÄKLARNÄMNDEN are appointed by the Swedish government. Much like practices in the USA, WorldProperties.com says, “If any seller or purchaser in a property transaction is not fully satisfied with the conduct of the estate agent they may issue a complaint towards the agent through the Board. The Board then looks at each individual complaint and acts accordingly towards the estate agent; they may issue warnings and in more severe cases expel estate agents from business (15).” FASTIGHETSMÄKLARNÄMNDEN also has a separate board of members that handle deals with commission disagreements between real estate agents. Agents must follow the decision of the board if a complaint is submitted and a resolution is given. In addition to this, there is also another possibility for customers to have their complaint towards the agent tried - in the National Board of Consumer complaints; however their decisions are only recommendations (15).
Much like the USA’s National Association of Realtors (NAR), Sweden has its own version called ASREA which is the Association of Real Estate Agents. ASREA was created in 1919 and has a track record of over 80 years of successful operation. ASREA is the “guiding star” for real estate agents and it holds the best interest of society as a whole. ASREA is often consulted by authorities as an advisory body on certain trade and real estate issues. Maklarsamfundet.se states that “The Association aims at developing and ameliorating the estate agency service by service, education and authorization of individual estate agents. The task of the Association is to inform on the preconditions for the work as an estate agent and on what may be regarded as good estate agency practice as well as to increase competence and improve the estate agent’s prospects of doing a good job. (16)” The real estate agents associated with ASREA have taken a pledge to work in compliance with specific ethical rules and regulations governing the real estate agent’s position within the industry, and when interacting with the public, employers, and colleagues. Maklarsamfundet.se also states that, “In capacity of his/her membership in the Association, the estate agent gets access to expert competence within the areas of law, insurances, education and marketing. The estate agent’s clients, the seller and the buyer, have access to the customer service of the Association enabling them to have answers to their questions about the estate agency service. Estate agents associated with the Association of Swedish Real Estate Agents have a liability insurance SEK 500,000 higher than what the law stipulates (16).”
Swedish real estate agents must follow a specific code of ethics. This code of ethics, which was created at the annual meeting of The Association of Swedish real estate agents 2002, contains a set of rules which an agent must live by in their day to day operations. Taken directly from Maklarsamfundet (which in Sweden was one of the international associations that initiated the International Consortium of Real Estate Associations (ICREA) Exhibit 2 has the complete Code of Ethics defined for all agents. The code of ethics contains some of the following rules: The real estate agent should follow the real estate brokers act and perform his/her assignment carefully and accordingly to good real estate agent oath, the real estate agent should show objectivity in relation to purchaser and seller, the real estate agent must strive to protect the interests of both parts in the best of ability, and the real estate agent should keep him/herself well informed about the current development in his/her field of profession.
As stated prior, in regards to commission/remuneration in Sweden, the payment/commission structure is set up in a written agreement between estate agent and seller. Like the practice followed in the USA, the seller typically pays the commission to the real estate agent(s). WorldProperties.com states that, “The commission fee varies from agent to agent and is linked to the price. Most estate agents have a fee based on a set percentage of the price, but if the price is low they have a fixed sum. It also varies when payment is due, some estate agents work after the rule that payment should be due as soon as the contract has been written with the purchaser, some work after the rule that payment should be due as soon as the new owner has access and has got their letter of purchase. There are no statutory restrictions on remuneration in Sweden.” The real estate agent is entitled to commission only if the transfer agreement has been concluded and completed with the real estate agent as intermediary between the seller and buyer by the estate agent. Deposits pertaining to contracts received by real estate agents must be handed over to the seller without delay, unless something else has been agreed upon in writing pertaining to this matter. Commingling funds is not allowed and money/other assets taken by the real estate agent on behalf of some (15) other party shall be kept separate from his own personal assets. The real estate agent’s commission may be reduced, if the real estate agent has significantly disregarded his obligations to the buyer or the seller. A referral system between real estate agents does in fact exist in Sweden. The general rules stated by WorldProperties.com states, “Referring a seller and object to a colleague equals -25 percent of the gross commission. Referring a purchaser to colleague equals -25 percent of gross commission. In mediating a purchase agreement to colleague equals - 50 percent of gross commission. When an object is sold by two estate agents in cooperation it equals -50 percent of gross commission (15).” See exhibit 7 for transaction cost (26).
The Eviction Process
In Sweden, the timeline from the filing of an eviction application to the time that the final execution of an eviction, is a long and complicated process that can go on for over a year. Eviction is generally the result of a breach of contract. SocWork.net states, “In Sweden around 12,000 eviction applications are brought to the social welfare offices while 4,000-5,000 evictions are executed by the enforcement administration each year mostly in the big cities. For those individuals who get evicted wait, apart from losing their residence, marginalization as a sentence of eviction goes on the tenant’s record. Approximately 85 percent of evictions are executed for failure to pay rent and for those individuals the eviction also results in a record of financial default.” In regards to actual numbers, throughout 2000 and 2005, averages of 4,400 households were evicted each year in Sweden. These numbers included people of all ages and included roughly between 1,500 and 2,000 children, which were under the age under 18. The numbers sound fairly small for a yearly rate but when analyzed together, there were roughly 22,000 eviction cases in the past six years.
In order for a landlord to file an eviction complaint, they must apply for the Enforcement Administration to evict their tenants. The Enforcement Administration is obligated to inform the social welfare offices that the eviction has been filed. This rule was created by the Housing Act and the Building Society Law. By reporting to the social welfare offices throughout the eviction process, the welfare offices have the responsibility to provide those being evicted with the help and support they need in accordance to the Social Services Law. Although the welfare office helps those who have been evicted, homelessness is still an unsolved problem in Sweden. In April 2006, 17,800 people were recorded homeless by the National Board of Health and Welfare (18).
Foreclosures
In Sweden, quite large differences in the risk-of-foreclosure for single-family housing exist between the various regions. Generally speaking, Sweden has an estimated time of foreclosure being roughly 6 months. Unlike in the US where most foreclosures are a result of mortgage defaults, in Sweden not all mortgage defaults end up in a foreclosure sale. The reason being is highly due to the fact that lenders and borrowers engage in negotiations which lead to an agreement between the lender and borrowers. The agreement basically solves the mortgage default situation and thereby stops the foreclosure proceedings/default. It is estimated that less than 10 percent of all applied foreclosures end up in a foreclosure (17).
In Sweden, The Swedish Enforcement Authority has the responsibility of enforcing foreclosures. The Swedish Enforcement Authority sells the real estate by the use of public auction in which the highest bid is accepted. Generally speaking, the condition for a foreclosed property assumes that the expected price is larger than the actual mortgage balance. After the auction itself, the creditors/lenders distribute the purchase sum among themselves. UrbanPolicy.Berkley.edu states, “The total number of enforced sales amounted to 14,000 over the period 1993 to 2006, compared to 600,000 sales in total. The highest number of foreclosures occurred in 1994 with almost 3,000 enforced sales out of around 46,000 sales all together. The selling price of all foreclosed sales totaled SEK 7,458 million. Hence, totaling the legal cost only amounted to SEK 373 million. Thus, investigating the determinants of foreclosure is of great economic importance (17).”
Exhibit 3 illustrates the foreclosure rates over time in Sweden. Over time, foreclosure rates have declined. The maximum foreclosure rates occurred in 1994-1995. The high foreclosure rates in the mid 90s can be attributed to the high interest rates of the time. Sweden experienced a hike in interest rates in the early 90s and in 1995, it interest rates were extremely high rate and in the 12% range. UrbanPolicy.Berkley.edu says, “At its maximum, the foreclosure rate in Sweden was around 8 percent, a very high number in comparison to other countries. The foreclosure rates started to decline in 1996 and by the year 2004, they were lower than 1 percent (17).”
Commercial Development and Construction
In Sweden commercial development have several procedures that must be followed in order to complete the construction lawfully and timely. Exhibit 4 shows the all the newly constructed buildings that have obtained a building permit/building application. The statistics shown in Exhibit 4 have been collected since 1996. In regards to building a commercial property, the first procedure is obtaining a building permit. In Sweden, this permit will be granted by the Building Committee if and only if the proposed property considered appropriate and in accordance with the Municipal Comprehensive Plan. DoingBusiness.org states, “The only way to secure an almost automatic right to a building permit is via the Detailed Development Plan (DDP). Formally, the planning initiative and responsibility lie in the hands of the municipality, even if in practice, much of the initiative and work to take a plan forward may come from the private developer. When a DDP is adopted, the land owner can get approval of the building permit application if the house is in accordance with the plan regulations, and if the construction satisfies the requirements. If the application is refused, the applicant has right to a compensation for the losses, provided that the application is filed within the prescribed time (of the DDP) (19).” This procedure/ application process takes roughly 60 days to complete and costs an average SEK 32,000. The second procedure is notifying the commencement of construction to the Building Committee three weeks prior to building and appointing a person responsible for the quality of the building project. These two announcements should take no longer than a day, and can be done simultaneously. However, there are additional procedures that take place throughout this time frame and thus make this process roughly 21 days to complete and about SEK 30,000. The third procedure involves obtaining a decision from the Building Committee on staking out the building and having. This process takes about 20 days to complete and SEK 10,000. Procedure number four involves attending a building consultation meeting and obtaining the necessary decision for a control scheme. The builder (which in many cases is BuildCo.) must attend a meeting with the building committee and the builder. This process takes about 19 days to complete and the associated cost is included in the building permit application fee and therefore this step is free of charge. The fifth stage in the building process is obtaining the final certificate. At the end of the project, the building committee must issue a final certificate if all requirements have been respected. The building permit does not concern the technical requirements for the building. It is the builder’s (i.e. BuildCo's) responsibility to make sure, and to certify to the Committee, in writing, that the building meets mandatory provisions (20). This process is also free of charge and takes about 10 days to complete. The sixth procedure involves connecting the water and sewage. The cost and time frame for this project highly depends on the distance from the common excavation sites. This process is generally costly and is roughly SEK 190,000 and takes 25 days to complete. The seventh step is connecting the electricity. Much like the sewage connection, the cost and time frame for this project highly depends on the distance from the common excavation sites. This procedure takes about 21 days to complete and costs SEK 70,000. Lastly, a telephone connection must be placed. This process costs SEK 10,000 and takes 20 days to complete.
EXHIBIT 1
EXHIBIT 2 (16)
EXHIBIT 3 (17)
Foreclosure rates in Sweden over time, 1994-2001
EXHIBIT 4 (20)
EXHIBIT 5 (24)
EXHIBIT 6 (25)
EXHIBIT 7 (26)
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.
Stamp Duty and Registration fee:
Buyers pay the stamp duty (1.5% of value) together with the registration fee of SEK825 (€88.50).
Agent's fee:
Real estate agent's fee, paid by the seller, is generally negotiable between 3% and 5% (26)
Sources
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(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
