Abolishment of the cooperative housing tax model

The cooperative housing tax model involves a multi-stage model where the land and any buildings are transferred to cooperative housing without taxation of the increase in value of the assets, either at company or shareholder level. A key feature of the cooperative housing tax model is that a limited company can merge with cooperative housing without taxation, and this is what now has been put a stop to.

The amendment will take effect from 15 October 2025, with the key factor being whether the decision of merger has been sent to the Register of Business Enterprises before this date. However, there are modifications to the effective date for housing development projects, but for completed rental properties, it will no longer be possible to implement the cooperative housing model. 

For housing developers, i.e. owners of land where the construction of housing is planned or has commenced, there are two different sets of entry into force provisions to consider if they wish to implement the housing cooperative model: 

1. Firstly, the change should not apply to limited liability companies that own land where, as of 15 October 2025, either 1) a valid outline planning permission or building permit for residential construction has been granted, or 2) one or more residential units have been pre-sold in accordance with the Housing Construction Act. The requirement for completed pre-sales will be met in cases where a final and binding sales agreement has been entered into. In such cases, very specific steps have been taken in connection with the start-up of the project, and no deadline is therefore set for submitting register notifications with a decision of merger to the Register of Business Enterprises.
    
2. Secondly, the right to tax-free mergers shall remain in force until 1 April 2026 for limited liability companies that own land where, as of 15 October 2025 1) there is no temporary use permit or completion certificate for residential buildings, or 2) there are plans to build new residential properties that will constitute at least 50% of the existing residential properties on the land. The project will not be required to have commenced before 1 April 2026. This means that the deadline for notifying a decision of merger will be postponed to 1 April 2026 for development projects that have not progressed as far as those in the first group.