New Economic Laws in Sweden for 2026 Bring Major Changes to Taxes, Housing, and Social Benefits

Starting in 2026, Sweden will implement several significant new economic laws affecting millions of citizens. A key change includes a reduction of the VAT on food from 12% to 6% between April 1, 2026, and December 31, 2027, aiming to lower living costs. Additionally, the job tax deduction will increase, providing an estimated monthly tax cut of about 400 SEK for average workers beginning January 1, 2026.

Elderly citizens will see notable benefits: dental care costs for those aged 67 and older will be covered up to 90% by the state, including treatments like fillings and root canals. Pensioners over 66 years will receive a higher basic deduction, reducing tax payments by roughly 150 SEK monthly. The tax-free allowance for investments on accounts like ISK and capital insurance will double to 300,000 SEK per person, encouraging more savings.

On the borrowing front, the right to deduct interest for unsecured loans (blancolån) will be removed, impacting approximately 5.8 million individuals. Meanwhile, housing support is set to improve, with raised cost limits on housing benefits aiding families facing high living expenses. The strict amortization requirement on mortgage loans will be eliminated, and the mortgage ceiling will rise from 85% to 90%, easing access to housing finance.

Additional changes include a reduction of VAT on dance event tickets from 25% to 6% starting July 1, 2026. The criminal justice system will tighten conditional release policies by requiring inmates sentenced to six years or more to serve at least three-quarters of their sentence, and the minimum prison term will be increased to one month.

For immigrants granted protection, the repatriation allowance will substantially increase from 10,000 SEK to 350,000 SEK per adult. Another notable shift is the allowance of uranium mining in Sweden, but municipalities retain the authority to veto such activities.

These laws collectively aim to stimulate economic activity, support families and seniors, and address financial and social vulnerabilities. According to the reports, these reforms will have a broad impact on taxation, savings, housing, social welfare, and environmental policies starting in early 2026.