How does the ROT deduction work for renovations?

The ROT deduction ("ROT-avdrag") gives you back 30% of labor costs (not materials) for renovations, up to 50,000 SEK per person per year. It applies to work on your permanent residence ("permanentbostad") or vacation home ("fritidshus") that you own. You only pay 70% of the labor cost to the contractor ("hantverkare") who gets the rest from the Tax Agency ("Skatteverket"). ROT can reduce your total renovation cost and the need to borrow. Always save receipts for improvement costs ("förbättringskostnader") to deduct when selling (minimum 5,000 SEK per year).