Tax Implications When Subletting to Your Own Employer
Recently, we have been receiving many questions about what rules apply when subletting a property to one’s employer or own company. The problem arises especially when, in good faith, you let your home to your employer who is a large company who very active in the rental market. Unfortunately, the regulations do not give any room for exceptions on a case-by-case basis, but everyone fall under the same rule and lose the standard deduction of 40,000 kr per year (2021 level) that you otherwise can take advantage of. This means that if you work for, as an example, Ericsson who is an active tenant in the rental market and has many employees going abroad on assignments, you would lose the standard deduction if you sublet to your own employer.
Conflict of Interest
One's home and income, for most of us anyway, are our primary investment and source of income. Therefore, we do not recommend putting both those eggs in the same basket. Here is a situation we watched unfold from a distance a few years ago:
Family X was moving to New York. One party in the family worked for a large employer in Sweden and felt that it felt secure to rent out their house to their own employer who in turn was relocation a family from Asia to Stockholm ."Win-win" they thought and happily moved to New York. All was well until they moved back home and felt that the wear and tear of their house was excessive. Now, they were presented to work out a severance with their own employer and to boot their tenant was now also an office mate. Safe to say, this was a sticky situation and one we recommend to avoid at all costs.