Real Estate and Construction

Real Estate and Construction

Understanding the industry

Sweden’s real estate and construction sector is expanding, with more projects underway than ever before. Currently, the most pressing industry challenges are increased competition and complex regulations. As your advisory partner, our specialists bring extensive experience supporting real estate and construction companies in both day-to-day operations and major strategic decisions. This may include transactions in Sweden and internationally, investment risk minimisation, international tax matters, as well as local accounting and rent invoicing. Our customers range from housing cooperative associations to property companies, construction firms, and municipalities.
 

Current challenges 

The real estate and construction industry faces both challenges and opportunities. Every day, BDO’s experts provide customers with trusted guidance on how to navigate and position themselves. Below are some of the most common issues that we discuss with our customers. 

Sustainability 

  • EU taxonomy for sustainable investments 
  • Circular economy 
  • Social issues in construction companies, human rights and safety on worksites 
  • Aligning sustainability efforts with the United Nations Agenda 2030 Sustainable Development Goals
  • Strategic work with sustainability issues 
  • Current requirements for sustainability reporting
  • Upcoming requirements for sustainability reporting – Corporate Sustainability Reporting Directive (CSRD)
  • GHG Protocol, emission reporting
  • New GRI reporting frameworks for sustainability information
  • Integrated Reporting (IR), adaptation to upcoming legal requirements
  • Task Force on Climate-Related Financial Disclosures (TCFD)
  • Climate risk analysis
  • Life Cycle Assessment (LCA)

Income tax  

There are several different ongoing investigations that affect income tax both for individuals and companies. 

Some examples of which are: 

  • Corporate taxation – review of interest deduction limitations. The investigation is to be reported no later than November 1, 2023.
  • Close company perspective of the close company regulations (3:12 regulations). The investigation is to be reported no later than November 1, 2023.
  • Both investigations have a large impact on future income tax plan for companies, including real estate companies.
  • Residential development projects – income tax issues, formation of housing cooperatives, stamp duty, and property tax. These are key taxes to monitor, as they go hand in hand.

Accounting and payroll 

We assist our customers with several different services, saving you time so you can focus on the core business. 

  • Industry‑specific accounting and payroll
  • Industry‑specific financial statements and annual reports
  • Accounting consultants with real estate expertise
  • Payroll consultants with industry expertise
  • Company‑tailored reports
  • Optimisation of financial processes (including digitalisation and automation)
  • Liquidity analysis – liquidity control
  • Budget,  forecasts, and sensitivity analysis
  • A sounding board for everyday matters


Audit 

  • IFRS® and K2/K3
  • Component depreciation 
  • Deffered tax
  • Merger accounting in acquisitions
  • Industry-specific annual reporting 
  • Sustainability reporting 
  • Interest deduction limitations 


Advisory service in real estate

Issues related to property valuation under the Land Code:

  • Landlord/tenant matters (termination of lease agreements), assessment of business damages
  • Breach of agreement 
  • Expropriation (business damages)
  • Feasability study 
  • Final assessment 
  • Properties are valued by a certified property appraiser, while business damages are assessed by BDO

Issues to consider for disputes: 

  • Revocation of permits 
  • Division of property/estate settlement 
  • Calculation of additional purchase price
  • Standstill (insurance matters)
  • Pandemic insurance 
  • Renovations (impact on operations)
  • Compulsory redemption 
  • Minority redemption 
  • Temporary and permenant damages 

Transactions that are always relevant:

  • Financial and tax due dilligence 
  • Restructuring 
  • Incentive programs 
  • M&A (real estate)
  • Fairness opinion
  • Review of financial models, e.g wind power projects 
  • Assessment of market interest rates 

Compliance often involves:

  • Contract compliance in construction projects 
  • Billing in accordance with agreements during ongoing projects 
  • Reasonability assessment of own damages or review of counterpart's claims in disputes
  • Review of agreements, compliance and follow-up

Our sectors and expertise