New Economic Laws in Sweden Bring Tax Cuts, Subsidies, and Mortgage Changes in 2026

From April 1, 2026, Sweden will see a series of significant changes in economic laws directly impacting personal finances. The VAT on food, commonly known as "Matmomsen," will be reduced from 12% to 6%, effective until the end of 2027. This reduction aims to lessen the cost burden on households. In addition, the job tax deduction (jobbskatteavdraget) will increase starting January 1, resulting in an average tax relief of approximately 400 SEK monthly for people with average salaries.

Pensioners will also benefit: those over 66 years will receive an increased basic deduction, lowering their taxes by around 150 SEK per month, while individuals aged 67 and above will be eligible for a new dental care subsidy covering 90% of dental treatment costs such as fillings and root canals.

The tax-free savings limit for Investment Savings Accounts (ISK) and capital insurance will double from 150,000 SEK to 300,000 SEK per person, encouraging greater savings. However, the government will abolish interest deductions for unsecured loans, which currently affects about 5.8 million Swedes.

Families facing high housing expenses will see an increased housing allowance cost limit. Mortgage regulations will also change: as of April 1, the strict amortization requirement will be removed, and the loan-to-value ratio will increase from 85% to 90%, pending parliamentary approval, potentially making home loans more accessible.

Starting July 1, VAT on dance event tickets ("dansbandsmomsen") will drop from 25% to 6%, aimed at promoting cultural activities.

On the legal front, conditional release from prison will be tightened, requiring that three-quarters of a sentence be served before eligibility, initially impacting sentences of six years or more. The minimum prison sentence will also rise to one month.

For refugees granted residence permits in Sweden, the return migration grant will drastically increase from 10,000 SEK to 350,000 SEK per adult, providing greater support for voluntary repatriation.

Finally, uranium mining is set to be permitted again in Sweden, with municipalities retaining veto power over such activities.

Economists forecast that these changes, combined with expected job growth, higher wages, lower taxes, and a more active housing market, will contribute to a stronger Swedish economy in 2026. Still, experts like Danske Bank's chief economist Susanne Spector advise individuals to build financial reserves against potential risks such as inflation shocks or stock market fluctuations.