High interest rates have led to more and more housing associations wanting their members to make capital contributions. In other words, contribute money to the association – to reduce the loans.
It's nothing I usually recommend, says Jonas Gustavsson, chief economist at Nabo.
The property managers SBC and Nabo both see a clear increase in the number of housing associations that want their members to make capital contributions to the association.
Between 2015 and 2022, SBC only helped a few housing associations to implement capital contributions. On average, three associations per year.
But in 2023, it increased significantly – to ten. So far this year, the property manager has helped 16 housing associations.
We see that interest has increased significantly since the end of last year, says Markus Pålsson, head of business innovation and development at SBC.
And the increase is mainly due to the higher interest rate.
Opportunity for interest deduction
The property manager Nabo had an increase of over 42 percent from 2022 to 2023. From 33 to 47. And so far this year, they have helped 26 associations to introduce capital contributions.
Either the members contribute with their own money or they take out loans to make capital contributions to the association.
And since the housing association's interest is paid by the members through the fee, it leads to avoiding fee increases – if the members contribute extra money.
Moreover, the interest paid by the association is not deductible. But if the loans are instead distributed among the members, they can deduct the interest.
There are drawbacks
But there are also drawbacks, according to Markus Pålsson. For example, if you plan to move in the near future.
It's not certain that you'll get back the amount you've paid when you sell the apartment. Especially not if you're going to sell soon.
According to Jonas Gustavsson, the biggest drawback is that members may have different economic conditions to pay capital contributions.
So it's nothing I usually recommend, only if you're in a financially strained situation.
In most housing associations, it's voluntary to pay capital contributions, according to both Markus Pålsson and Jonas Gustavsson. But sometimes members can be forced.
Then everyone pays the same percentage based on how large a share they own. But it's a bit more unusual, says Pålsson.
