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STOCKHOLM

Stockholm county announces plans to raise tax

The political majority in the Stockholm county administrative region - the Social Democrats, Centre Party, Green Party and Left Party - has announced plans to increase taxes in its budget for 2024.

Stockholm county announces plans to raise tax
Regional finance councillor Aida Hadzialic. File photo. Photo: Marko Säävälä/TT

The council voted to increase regional income tax by 30 öre for every hundred kronor and also to increase patient fees and raise the price of a travel card on SL public transport.

According to the regional councillor for finance, Aida Hadzialic, the move will protect the healthcare service from having to make dramatic cuts.

“It’s about being able to look healthcare workers in the eye,” she told a press conference.

In Sweden income tax is highly decentralised, with most wage earners paying income tax only to their municipality and region. Only those who earn more than 598,500 kronor a year pay income tax to the state. 

The four parties’ budget for Stockholm region proposes that the patient fee for urgent care centres (närakuten) be raised from 250 kronor to 275 kronor, and the fee for outpatient care (öppenvården) would be hiked from 250 to 275 kronor.

Those with a 30-day pass on SL public transport would see the price of their pass increase by 50 kronor in 2024 and another 40 kronor in 2025, with the price of a single ticket going up by 3 kronor under the new proposal.

Hadzialic underlined the fact that the region is facing increased expenses of over ten billion kronor, with a range of measures necessary to plug the gap.

“All regions are currently struggling significantly with their finances, and that applies to the Stockholm region too,” she said.

Gustav Hemming, the regional councillor for climate, infrastructure and the archipelago, has accused the government of letting down regions.

“A tax increase of 30 öre in this situation is the alternative to chaos,” he wrote in a press statement. “The government’s betrayal of the regions has left us forced to choose between either firing healthcare workers en masse and closing healthcare centres, or raising taxes.”

The government did propose a ten billion kronor increase in regional and municipal funding in its budget for 2024, as well as a six billion increase in targeted support.

According to Hadzialic, that money is welcome, but nowhere near enough.

Opposition councillor Irene Svenonius, a member of the Moderates who are in government at the state level, is critical of the budget put forward by the majority in the Stockholm region.

“This is a twofold betrayal,” she wrote in a comment to TT newswire. “A tax increase of 30 öre and still, a budget which comes up over a billion kronor short. Stockholmers will have to pay more, but get less. This is not taking responsibility.”

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PROPERTY

For sale: New record as flood of apartments hits the market in Sweden

A flood of new homes are being listed as up for sale in Sweden as sellers and buyers eagerly hope for an imminent interest rate cut.

For sale: New record as flood of apartments hits the market in Sweden

A record number of apartments were available on Sweden’s main property listings site last month.

A total of 32,233 apartments were listed for sale on Hemnet in April, 40 percent more than the same month last year and the highest number ever for a single month. A lot of these ads are however for upcoming sales rather than apartments that are already up for public viewings.

“The high supply is an effect of a long period of a sluggish market rather than a risk factor for new price drops. This spring we’ve been seeing both rising prices and more activity. Especially as a result of the fact that we appear to be at peak interest rate and that the first interest cut is drawing near,” writes Hemnet market analyst Erik Holmberg in a comment quoted by Swedish news agency TT.

ESSENTIAL TIPS:

The previous record month was October 2023, when a total of 31,985 ads were posted on Hemnet.

The Local has previously reported that Swedish property prices are also on the rise as the market kicks into action.

A major reason behind the flood of apartments for sale is the expectation that Sweden’s central bank, the Riksbank, will soon slash the country’s main interest rate. While this is expected to bump up prices, it is on the other hand also likely to lead to lower mortgage rates.

EXPLAINED:

The Riksbank will announce its next decision on Wednesday.

This is a crucial announcement as the so-called policy rate is the bank’s main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages. 

Sweden’s policy rate is relatively high at the moment, 4.0 percent (the highest since 2008), because of the Riksbank trying to bring down inflation. If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.

But now that inflation is on its way down, Riksbank chiefs themselves have said that they think it’s likely that they will cut the policy rate in either May or June, and several economists predict that the cut is going to come sooner rather than later, which would mean this week.

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