Christian Democrats Propose Gradual Capital Gains Tax Cut on Housing to Boost Market Mobility

The Christian Democrats (KD), led by Ebba Busch, have put forward a proposal to gradually reduce the capital gains tax on profits from housing sales in Sweden. Currently set at 22%, the party suggests lowering this tax by 2 percentage points annually after a homeowner has held their property for five years, with the tax being completely phased out after 16 years. This initiative is positioned as a key issue for the 2026 election campaign.

Busch emphasized the "enormous response" the proposal has received and underscored its goal of improving mobility in a sluggish housing market, particularly to aid families aspiring to enter the single-family home segment. Economically, the proposal is expected to cost the government between 12 to 15 billion SEK annually in lost tax revenue. Busch envisions including this proposal in a possible new Tidö agreement, should the coalition parties win the next election.

However, economists differ in their assessments. Daniel Waldenström, a professor of economics, remarked that while taxing capital gains on housing is appropriate, the suggested model with rates varying according to the length of ownership is unconventional and potentially ineffective in spurring market activity. Similarly, Bo Söderberg, a docent at KTH, highlighted that broader issues—particularly rental regulations—pose significant hindrances to housing market mobility and called for more comprehensive reforms rather than isolated tax changes.

Despite the economic debate, Busch believes that the tax cut proposal could unleash substantial popular support and create electoral momentum by returning up to 15 billion SEK annually to homeowners. She regards housing market mobility as a critical societal issue alongside other political priorities such as migration, energy, and crime prevention.