Most car owners change cars from time to time, but do you have to pay tax on the money you get from the car you sell?
Here you get the answer.
Do you have to pay tax when you sell a car?
The answer to whether you as a private person have to pay tax when you sell a car is yes, but only if you have actually made money.
When you sell a car, it can feel like you are making a lot of money, but even if the amounts are large, it does not mean that you have made a profit.
On the contrary, cars are usually a losing business.
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Then you have to pay tax when you sell a car
A car is counted according to Tax Agency’s rules as a personal asset, and any profit from a car deal counts as a capital gain.
A capital gain is calculated by deducting the cost amount, i.e. what the asset has cost, from the selling price.
If the remainder is positive after deducting the cost amount from the selling price, you have made a profit, and if it is negative, you have made a loss.
Capital gains are taxed at 30 percent, while capital losses are not taxed. Capital losses from personal assets may not be deducted in the return.
A car is usually a loss business – Photo: Leo Sellén/TT This is how the calculation works
For example, if you bought a car for SEK 200,000 and sell it for SEK 250,000, you have made a capital gain of SEK 50,000.
However, the cost amount includes according to Lawline not only the purchase price but also expenses that have clearly increased the car’s value. However, normal repairs and ongoing maintenance are not to be included.
For example, if you have bought a vintage car for SEK 200,000, completely renovated the engine for SEK 50,000, and then sell it for SEK 250,000, you have not made a capital gain.
Then you don’t have to pay tax
Even if you have made a small capital gain when you sell your car, this does not necessarily mean that you have to pay tax on this gain.
Capital gains from so-called “other assets”, which include personal assets, only have to be declared if the gains from all other assets you have sold during the year in total exceed SEK 50,000.
For example, if you have only sold a car with a profit of SEK 40,000, you do not have to pay.
If, on the other hand, you also sold a painting in the same year for a profit of SEK 20,000, which together with the profit becomes a total profit of SEK 60,000, you must pay tax on the SEK 10,000 that exceeds the limit of SEK 50,000.
The resulting tax you have to pay is SEK 3,000.
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