Beginning on January 1st 2008, the tax is to be replaced by a council charge of 6,000 kronor ($890) per year, or a maximum of 0.75 percent of the taxable value.
The government had previously suggested that the council fee would cost home owners 4,500 kronor, with a limit set at one percent of the taxable value.
The charge for apartment complexes will be a maximum of 1,200 kronor (rather than 900 kronor) per apartment, or 0.4 percent of the taxable value.
Capital gains tax will also see a rise from 20 to 22 percent.
The government said that nobody would have to pay more in council fees than they had previously paid in property tax.
The possibility to carry over capital gains tax liability on homes will remain but will be limited to a maximum of 1.6 million kronor. This possibility will vanish however if a property is passed on as an inheritance, in a will, as a gift or through the division of a joint property.
The proposal is to be fully financed within the housing sector.
Finance Minister Anders Borg and Christian Democrat leader Göran Hägglund held a press conference on Wednesday afternoon to present the proposals.
“It feels fantastic that the government can now live up to its election promise and present a proposal regarding the abolition of the state residential property tax,” said Hägglund in a statement.