The KD proposal is that the capital gains tax of 22 percent of the profit in housing transactions is reduced by 2 percentage points per year starting from the time the owner has had the home for five years. After 16 years, the reductions would result in a capital gains tax of zero.
It has received a huge response. Here is an opportunity to build up popular pressure before the election, says Ebba Busch in an interview before the KD's national congress in Linköping this weekend.
We need to increase mobility in the Swedish housing market, she adds.
May return
Elisabeth Svantesson says that lower capital gains tax is certainly popular "with many" and does not close the door.
"It's one of many issues that could be on the table during the next term. But we'll have to come back to that," she tells TT in connection with a press conference.
She points to the spring's planned adjustments to the amortization requirement and mortgage ceiling as other measures that could boost the housing market.
But capital gains tax is one issue among many that can absolutely affect and increase sales, she says.
KD estimates that the tax cut would cost 12-15 billion per year in lost revenue for the state.
It's not small potatoes. But the sluggishness in the Swedish housing market is no small issue either. It has enormous consequences for families with children who want to enter the villa segment, says Busch.
Expect us to continue to push this forward.
For many years, the Swedish Home Owners Association has branded the capital gains tax on housing gains as a “moving tax” that creates lock-in effects. But economists are divided on this.
"Capital gains on housing should be taxed. But how high we tax them is debatable," says Daniel Waldenström, professor of economics at the Institute for Business Research (IFN).
Odd model
Deregulation of the rental market would give more momentum to the move to big cities, he believes, while different tax rates depending on the length of tenure would look odd compared to other countries:
This probably does not contribute positively to the housing market.
Associate Professor Bo Söderberg, KTH, agrees:
The question is whether this solves any major problems. It is highly doubtful, he says of the KD proposal.
All major institutions in the housing market can be questioned. They should be reviewed. Although it is something different than a single percentage in tax.
Joakim Goksör/TT
Tobias Österberg/TT
Facts: The KD proposal in brief
TT
Today's model of capital gains tax on housing was introduced in 1991. Ten years later, the tax rate was increased from 15 to 20 percent and in 2008 it was raised to the current level of 22 percent.
Last year, the state collected a whopping 27 billion in taxes on profits from the sale of villas, condominiums and returned deferrals from just over 163,000 people, according to the Swedish Tax Agency.
The Christian Democrats (KD) now want to invest 12-15 billion per year in lowering the tax rate by 2 percentage points per year after five years of home ownership, down to 0 percent in capital gains tax after 16 years of ownership. The proposal has been presented in a parliamentary motion by KD's housing policy spokesperson Larry Söder and party colleague Hans Eklind.
The other three Tidö parties – the Moderates, the Liberals and the Sweden Democrats – have not taken a stand on the issue, although there have been some encouraging statements from individual party representatives.
