Swedish Centre-Right Alliance Would Abolish Property Tax

by Ulrika Lomas, Tax-News.com, Brussels

06 July 2006

Reports have suggested that Sweden's centre-right opposition coalition has agreed to abolish the country's unpopular property tax if returned to power in the forthcoming national elections.

The four members of the Alliance, which consists of the Moderate Party, the Liberal Party, the Christian Democrats, and the Centre Party, have reportedly agreed at their summer conference that they would freeze the tax in 2007 and impose a ceiling of SKR5,000 ($700). They would then abolish the tax entirely in 2008.

One report, carried by online English language journal The Local, quoted Lena Forsman, the head of communication for the Centre Party, as stating that "certain things have been agreed upon and they relate to property tax".

However, the spokeswoman added that details of the property tax proposal are not yet finalised.

The property tax, which is charged at a rate of 1% of the assessable value of a property, is one of the largest sources of revenue for the government, and has grown in tandem with increasing house prices. It is estimated that the tax will generate more than SKR28 billion in receipts this year, rising to over SKR32 billion by 2008.

If the Alliance wins the September election, it plans to look at replacing the property tax with a lower, locally charged levy.

Sweden continues to bear the heaviest overall tax burden in Europe, with a tax to GDP ratio of 51.2% in 2004.

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