Sälengodset · Mountain Luxe
VAT on the letting of a mountain cottage is not always as straightforward as it might first appear.
Updated August 2026
The basic rule is that letting out a property is exempt from VAT. However, there is an important exception: short-term letting of furnished accommodation may, under certain conditions, be classified as the letting of rooms in a hotel or similar business and is then subject to VAT at 12 %.
This means that the same type of mountain cottage may need to be dealt with differently depending on who owns the property, how it is let out and the business for which the owner is registered.
That is why we deal with the VAT issue as soon as a property is connected to Sälengodset.
This is general information, not individual tax advice. Where there are grey areas, each individual situation must be assessed on the basis of its specific circumstances. If necessary, the homeowner should check the assessment with their accountant, tax adviser or the Swedish Tax Agency.
Overview
| Standard starting point | |
|---|---|
| Privately-owned mountain cottage | The rental is normally VAT-exempt |
| Active short-term lettings similar to hotel operations | May be subject to 12 % VAT |
| A mountain chalet owned by a company | The form of ownership does not determine the VAT – the letting must be assessed |
| VAT on expenses | The right to deduct depends on whether the let is subject to VAT and what the cost relates to |
It is therefore not enough simply to establish that a house is privately owned or owned by a limited company. It is the letting itself and the circumstances surrounding it that must be assessed.
Part 1
In the case of a privately owned holiday home, the basic principle is that letting it out is VAT-exempt.
This applies to the common situation where a private individual lets out their own holiday home for part of the year. In such cases, no VAT is charged on the let, and there is normally no right to deduct input VAT on costs relating to the VAT-exempt let.
However, even private lettings can, in certain situations, take on a different character.
If a furnished property is let on a recurring basis for short stays and the business is conducted in a manner similar to that of a hotel, the letting may instead be subject to the rules on VAT on accommodation.
It is therefore not possible to determine the VAT issue simply by considering whether the owner is a private individual.
Part 2
The Swedish Tax Agency distinguishes between ordinary, VAT-exempt property lettings and room lettings carried out as part of a hotel business or similar activity.
The assessment focuses on the actual content and purpose of the activity.
Circumstances that may indicate that the letting of rooms is subject to VAT include, for example:
No single factor should be used in isolation to determine the VAT issue. It is the business as a whole that needs to be assessed.
If the let is classified as the letting of rooms in a hotel or similar business, the VAT rate for the accommodation service is 12 %.
Part 3
It is particularly important to get this right from the start.
The fact that a limited company is registered for VAT does not automatically mean that the letting of the company’s mountain cabin is subject to 12 % VAT.
For example, a company may be registered for VAT in respect of consultancy services, retail, call centre operations or some entirely different activity. That VAT registration does not in itself mean that the letting of a mountain cottage forms part of the company’s VAT-liable activities.
That is why we need to take a closer look at the letting business in particular.
If, on the other hand, the company is registered, for example, for short-term lettings or the provision of temporary accommodation, and its actual operations are conducted in that manner, there is a much clearer basis for the letting to be subject to 12 % VAT.
That is why we do not use the model company = VAT. Instead, we use:
What business is registered – and how is the letting actually carried out?
The starting point for Sälengodset
Our process
When a company-owned property is to be connected to Sälengodset, we therefore wish to understand the VAT status before the tenancy begins.
Where necessary, we will review supporting documents such as:
The aim is not to make all lettings subject to VAT. The aim is precisely the opposite:
A VAT-exempt arrangement must be treated as VAT-exempt – and a rental subject to VAT must be treated with the correct VAT rate.
Once the circumstances are clear, we set up the property according to the correct model from the outset. If the VAT status cannot be determined with sufficient clarity, we will request additional documentation or ask for the assessment to be confirmed by the property owner’s accountant, tax adviser or the Swedish Tax Agency.
In this way, we reduce the risk of VAT being charged where it should not be – or of VAT not being declared where it actually should be.
Part 4
This is an important consequence of the VAT assessment.
In the case of VAT-exempt lettings, there is normally no right to deduct input VAT on costs relating to the VAT-exempt letting. The VAT then becomes part of the cost.
In the case of VAT-liable lettings, there may be a right to deduct input VAT on costs attributable to the VAT-liable business.
However, that does not mean that all VAT relating to the house is automatically deductible.
There are specific restrictions for residential properties, including the rules on permanent residence. The right to deduct may therefore vary between, for example, costs arising directly from letting and costs relating to the property itself, fixtures and fittings, repairs or private use.
The right to deduct must therefore also be assessed on the basis of what the individual expense relates to.
This is yet another reason why VAT status should be clear from the outset.
Part 5
VAT and income tax are two separate matters and should not be confused.
If the mountain cottage is a private residential property, any surplus from letting it is normally taxed as capital income.
For a privately owned detached house or holiday home, you are normally permitted to:
The remaining surplus is taxed at a rate of 30 %.
If a private holiday home is let out for 150,000 kronor during the year:
These are the rules governing income tax on a private residence and should be distinguished from the question of whether the letting is subject to VAT in a particular case.
Frequently asked questions
The basic rule is that the letting of property is exempt from VAT. However, short-term letting of furnished accommodation may, under certain conditions, be classified as the letting of rooms in a hotel or similar business. In such cases, 12 % VAT applies. *(siffran tappad!)
No, not always. Private lettings are normally exempt from VAT, but if the letting takes place on a regular basis and in a manner similar to a hotel business, a VAT assessment may need to be carried out.
Not automatically. The fact that the property is owned by a limited company or that the company is already registered for VAT is not sufficient to determine the matter. We need to know how the letting business in question is registered and operated.
To understand the type of business for which the company is registered for VAT. A company that is registered for VAT for a completely different type of business is in a different situation to a company that has registered the short-term letting of temporary accommodation as part of its business. The VAT registration certificate and the description of the business are therefore important supporting documents in the assessment, together with how the lettings are actually carried out.
The business description is an important basis, but the actual operations must also correspond to what has been recorded. We therefore examine both the records and the reality behind the letting.
It depends on the VAT status and what the cost relates to. If the letting is VAT-exempt, there is normally no right to deduct VAT on costs relating to the VAT-exempt activity. In the case of VAT-liable lettings, there may be a right to deduct VAT on costs relating to the VAT-liable activity, but specific restrictions apply to residential properties. Therefore, the right to deduct VAT should not be assessed on a flat-rate basis for all costs.
Yes. We go through the ownership structure of the property and the documentation required to ensure the letting is set up correctly from the outset. We do not provide individual tax advice, but we do help to identify the relevant VAT arrangements and the documentation required. Where the boundaries are unclear, we ask that the assessment be confirmed by the property owner’s accountant, tax adviser or the Swedish Tax Agency.
The issue of VAT shouldn’t be left unresolved once the first bookings have already come in. That’s why we’re addressing it right from the start.
Private individual or company. VAT-exempt or subject to VAT. We go through the requirements before the property is listed – so that the letting has the right financial structure from the very first booking.
Do you have any questions about letting your mountain cottage through Sälengodset? Please get in touch and we’ll go through the property, the ownership arrangements and the terms of the let together.
Contact usWould you prefer to speak on the phone first? Give us a call 070-573 48 10 or email info@salengodset.se.