Sweden: Valuation of renovated buildings for tax purposes

Buildings subject to a thorough renovation must be taxed on the basis of half of the costs incurred for the renovation and then “a supplement”

Buildings subject to a thorough renovation must be taxed

The Supreme Administrative Court (Högsta förvaltningsdomstolen) on 21 June 2021 issued a judgment clarifying how renovated buildings are to be valued for tax purposes.

Most buildings undergo extensive renovation or rebuilding at some point during the life of the building. The Supreme Administrative Court’s decision provides guidance regarding the correct assessment of a renovated building’s valuation for tax purposes.

The court generally accepted the methodology advocated by the Swedish tax agency—buildings that are subject to a thorough renovation must be taxed on the basis of half of the costs incurred for the renovation and then “a supplement” or allocation regarding the value of the existing building structure or frame.

Still, if the building’s valuation under this methodology is unreasonably high, there can be exceptions.
 

Read a June 2021 report (Swedish) prepared by the KPMG member firm in Sweden

 

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