Debate Intensifies Over Kristdemokraterna's Proposal to Cut Capital Gains Tax for Homeowners

Kristdemokraterna (KD) has sparked a heated debate with its proposal to eliminate capital gains tax for homeowners who have lived in their properties for over 16 years and to gradually reduce it for those residing more than five years. Party leader Ebba Busch argues this will boost housing market mobility by encouraging long-term homeowners to sell and move. However, economic experts and political parties contest this view.

Professor Daniel Waldenström from the Institute for Business Research counters that Sweden already has the highest housing mobility in the EU despite its high capital gains tax, and finds no evidence that tax cuts would increase turnover. Liberals’ Cecilia Rönn emphasizes that reducing capital gains tax won’t increase housing supply, urging instead for deregulation and faster housing construction processes.

The fiscal impact is significant — the tax cuts could cost the government between 12 and 15 billion SEK annually, an amount comparable to the state’s spending on climate and environmental programs in 2024. Sweden Democrats’ Oscar Sjöstedt expresses cautious support but stresses the need for a comprehensive financial plan to offset lost revenue.

Finance Minister Elisabeth Svantesson noted that KD’s proposal is one among several potential approaches for the next electoral period, including adjustments to amortization requirements and mortgage ceilings as ways to stimulate the housing market.