Government amends property tax reforms

The Finance Department has proposed a number of changes to the residential property tax reforms announced earlier this year.

The initial proposal included limiting property tax to 4,500 kronor or a maximum of 1 percent of the taxable value, as well as raising capital gains tax on property from 20 to 30 percent.

Under the new scheme property tax would instead be restricted to 0.8 percent of the taxable value with a 25 percent cap on capital gains tax.

There are a number of ways in which this will be financed, including placing a ceiling of 1.4 million kronor on tax postponement and a 2 percent interest rate charge on the postponement of capital gains tax.

“This will reduce the risk of rising prices,” said Finance Minister Anders Borg.

Formal consultation on the new proposals will take place during the summer. Residential property tax in its current form is to be abolished on January 1st 2008.