Swedish political parties propose reforming ROT tax deduction

Six out of eight Swedish parliamentary parties support reforming the ROT tax deduction to prioritize energy-efficient measures. The proposed changes aim to shift the focus toward insulation, climate shells, and energy-efficient technology to help meet EU energy efficiency requirements and reduce household energy costs.

Currently, the ROT deduction is one of Sweden’s most expensive subsidies, costing approximately 22 billion SEK nationally. While originally introduced to combat illegal labor and stimulate the economy following the 2008 financial crisis, the Swedish National Audit Office has noted that its current socio-economic benefits do not justify its cost. Much of the deduction is currently used for aesthetic improvements or expansions, with over half of the benefits going to high-income households.

Proponents argue that redirecting the deduction toward energy renovations could lower peak electricity demand during cold months, reduce the need for grid investments, and ultimately lower electricity network fees. Only the Moderate Party and the Sweden Democrats have expressed opposition to the reform, citing the popularity of the existing deduction.