The Government has decided on a temporary discount for fixed rental costs in vulnerable sectors

Published

After the European Commission approved the Government’s state aid notification on Wednesday, the Government could today adopt an ordinance on a discount for fixed rental costs in vulnerable sectors as a way to mitigate the financial consequences of the virus outbreak. The new aid is based on an agreement between the Government, the Centre Party and the Liberal Party.

More information about the aid

Västra Götaland County Administrative Board is coordinating the work of the county administrative boards. Information on the temporary discounts for fixed rental costs and how to apply for state aid is available on the county administrative board websites. The state aid is applied for retrospectively and it is therefore not possible to apply for support now.

The COVID-19 virus outbreak has rapidly had a major economic impact across Sweden. The situation is now very serious for large parts of the hotel and restaurant sector, and the durable consumer goods sector. In its additional amending budget, the Government is allocating support of SEK 5 billion to reduce fixed rents for vulnerable sectors such as durable consumer goods, hotels, restaurants and certain other activities. This covers, for example, retailers, logistical activities, restaurants as well as the organisation of congresses/fairs, and also consumer services such as dentists, physiotherapist practices, and hair and beauty salons.

“This is one of several initiatives taken by the Government to help businesses in Sweden and it is an important that the rental discount is now made available to businesses,” says Minister for Business, Industry and Innovation Ibrahim Baylan.

Because it is a matter of state aid, the Government’s notification of state aid needed to be approved by the EU before the Government could take a decision. After the EU Commission approved the state aid on Wednesday, the Government could today adopt the ordinance.

“It serves both business operators and their landlords to get through this crisis. It is therefore important that central government can go in and make it easier for property owners to take responsibility and take a portion of the rent,” says Minister for Financial Markets and Housing Per Bolund.

Under this initiative, landlords who reduce fixed rents for tenants in these vulnerable sectors during the period of 1 April to 30 June will be able to apply for aid to compensate part of the reduction in rent. The compensation provided will be at most 50 per cent of the reduction in fixed rent, i.e. the actual discount, but at most 25 per cent of the original fixed rent.

Landlords apply online for the compensation retrospectively via the county administrative boards’ websites and it is available to all landlords. Because the support is applied for retrospectively by the landlords, the county administrative boards will accept applications from 1 July, but 31 August at the latest. It is therefore important that landlords now take responsibility for entering into agreements so as to support their tenants.