It's no secret that Skellefteå tradesmen are quite expensive. But if you're looking to refresh your new home you might want to take advantage of ROT and RUT deductions.
What are ROT and RUT deductions?
You might have come across the Swedish words “ROT-avdrag” and “RUT-avdrag”. “Avdrag” means deduction, so the words simply mean ROT deduction and RUT deduction. ROT (reparation, ombyggnad och tillbyggnad) and RUT (rengöring, underhåll och tvätt).
These acronyms translate to "repair, renovation, and extension" for ROT, and "cleaning, maintenance, and laundry" for RUT.
What you save:
- ROT deductions: Companies providing the service can deduct up to 30% of labor costs, allowing you to claim a maximum of 50,000 kronor annually.
- RUT deductions: Companies can deduct up to 50% of labor costs, with a combined ROT & RUT maximum deduction of 75,000 kronor per person per year.
Eligible services:
ROT covers a wide range of home improvement projects, including:
- Repairs: Flooring, tiling, doors, facades, gutters, balconies, etc.
- Renovations and extensions (but not demolition of existing buildings): Removing walls, building additions, balconies, and indoor pools.
- Other services: Painting, electrical work, windows, and heating installation.
RUT encompasses various tasks to keep your home running smoothly:
- Appliance repairs
- IT services & broadband installation
- Childcare
- Snow removal
- Moving and packing
- Cleaning, laundry, and minor clothing repairs
- Gardening
Important requirements:
To qualify for these deductions, you must:
- Be 18 years or older and a resident taxpayer in Sweden.
- Own or co-own the property where the service is performed (småhus, bostadsrätt, or ägarlägenhet).
- Hire a company with F-skatt approval (meaning they pay self-employment taxes) and who is not a close relative.
- Pay electronically for RUT deductions (card, BankID, Swish, or pay-in form).
You must:
- Be fully liable for tax during the tax year.
- Have incurred expenses for ROT and RUT work.
Property ownership for ROT deduction:
You must own the dwelling (småhus, bostadsrätt, or ägarlägenhet) where the ROT work is carried out. This can be your primary residence, a second home, or a property where your parents reside. However, building or renovating a completely new house does not qualify.
What is considered ROT work?
Repair and maintenance, renovations, and extensions qualify as ROT work – but only if performed on a dwelling you own and reside in.
What is considered RUT work?
Domestic services performed at your primary residence, holiday home, or a similar property used by your parents qualify for RUT deductions.
Property ownership for RUT deduction:
You do not have to own the home in which the service is performed to be entitled to tax deductions.
Payment process:
The service provider, is responsible for applying for the client's preliminary ROT and RUT tax deduction and requesting reimbursement from Skatteverket. The client then pays the remaining balance based on your invoice. Remember, only labor costs are tax-deductible; materials and travel are not included.
Additional considerations:
- You cannot perform work for yourself or close relatives to claim these deductions.
- Clients cannot receive RUT deductions for work done in rented or leased properties.
Understanding "dwelling" for deductions:
- A dwelling refers to a residence (wholly or substantially used for housing) within the EEA area, including garages, storage rooms, laundry rooms, second homes, and time-share apartments.
- Hotels, guest houses, and youth hostels are not considered dwellings.
- Common areas in apartment blocks (entrances and staircases) are not eligible for deductions.
Remember:
- This is a summary. Refer to Skatteverket.se for more complete information.
- Examples of eligible and ineligible ROT and RUT work can be found on their website (in Swedish).