An official report proposes increased possibilities for raising presumption rents, reversing limitations imposed by the 2022 court rulings

There has been significant debate and criticism in the real estate sector regarding the ability to raise presumption rents, particularly after two court rulings in 2022 set restrictions on this practice. Now, a new government report suggests a solution. The Swedish government’s report* proposes expanding the possibility to continuously raise presumption rents, without the limitations imposed on the market by the 2022 court decisions. This is aimed at improving conditions for the construction of new residential buildings. According to the report, presumption rents could be adjusted in line with general rent developments in the relevant area.

In Sweden, rents for residential units are normally set based on the utility value (Sw. bruksvärdeshyra). However, the presumption rent model was introduced in 2006 to incentivize investment in the construction of residential apartments. In short, this allows a landlord to agree with the Tenants’ Association (Sw. Hyresgästföreningen) on the rent levels for newly constructed residential units. These rent levels are then presumed to be reasonable for a period of 15 years, during which tenants cannot challenge them to align with the utility rent model. Until the 2022 court rulings, presumption rents could increase annually to reflect general rent developments in the area.

In two rulings in June 2022*, the Court of Appeal, which has final authority on certain rent matters, clarified how this section of the law should be interpreted. The court introduced a model in which presumption rents could be increased by only half of the general rent rise in the area, as long as the general increase stayed below 3%. If the increase exceeded 3%, the presumption rent could be adjusted by 3/4 of the additional increase. These rulings were met with heavy criticism from property investors and the construction sector, arguing that it created unfavourable conditions for new housing developments.

On September 2, 2024, an official report was published proposing legislative changes to the presumption rent system. The report suggests that presumption rents should increase by the same percentage as general rent growth in the relevant area. 

Additionally, the report recommends that parties should be able to agree that modifications to an apartment, either upgrades or downgrades, could result in rent adjustments even after the presumption rent has been set. It also suggests landlords and the Tenants’ Association may agree to refer disputes regarding the amount of presumption rent to arbitration.

These changes are proposed to take effect on January 1, 2026, and would also apply to lease agreements signed before this date. However, it should be noted that the report is currently at the inquiry stage and must result in a government bill and parliamentary approval process before becoming law.

*SOU 2024:62 – En förbättrad modell för presumtionshyra.

* Svea hovrätt ÖH 14593-20 and ÖH 1854-21