ROTavdraget

ROTavdraget, short for Renovering, Ombyggnad och Tillbyggnad, is a Swedish tax deduction that reduces the cost of labour for certain home renovation and improvement work on private residences. The deduction is designed to encourage maintenance and upgrading of dwellings and is available to individuals who pay for certified contracting work in Sweden.

What counts as eligible work: The deduction applies to labour costs for renovation, rebuilding, or extension projects performed by a registered contractor in a dwelling that is used as a private residence. It does not cover materials, purchases of tools, or services outside the home environment. The work must be performed by a professional contractor and the residence must be in Sweden.

How the deduction works: The deduction equals 30% of eligible labour costs, up to a yearly cap per person. Historically, the ROT cap has been set at 50,000 SEK per person per year; when combined with the RUT deduction for household services, the total per person can reach up to 75,000 SEK per year. The deduction can be applied in two ways: the contractor can reduce the invoice upfront, or you can claim the deduction when filing your annual tax return. The contractor must report the work to the Swedish Tax Agency (Skatteverket) using the recipient’s personal identity number.

Eligibility and limits: The benefit is typically available to private individuals paying for work on their own residence. Rules are subject to changes, and the applicant should verify current eligibility, limits, and documentation with Skatteverket.

In summary, ROTavdraget lowers labour costs for approved renovation-related work on private Swedish homes, within annual per-person limits and under supervision of the Swedish Tax Agency.