Disparities in Sweden's Record Spending on Interest Deductions Exposed

Sweden's government has reported a dramatic rise in its spending on interest deductions, now totaling a record 61 billion SEK for the income year 2024, compared to just 28 billion SEK in 2020. This increase is attributed to escalating interest rates, which have heightened costs for subsidizing mortgage and loan interest. A study by the Swedish Statistics Agency reveals that approximately 43% of these deductions favor the wealthiest quarter of earners, specifically those making over 52,000 SEK monthly.

The geographical nature of these deductions shows a stark disparity; affluent urban areas like Danderyd, Lidingö, and Nacka see the most significant benefits. In Danderyd alone, the average refund for high-income men amounts to 40,736 SEK, starkly contrasted with a mere 1,018 SEK for elderly women in lower-income rural locales like Dorotea. Such findings raise concerns regarding both financial equity and gender disparities in these benefits, as men, particularly those of middle age, disproportionately gain.

Economists are questioning the sustainability and equity of this subsidy system, suggesting a possible reassignment of these funds to other pressing societal needs. Current policy provides a 30% rebate on interest costs up to 100,000 SEK and 21% thereafter, devoid of a total deduction cap. This model has drawn criticism for its lack of fairness in distribution, raising essential discussions about the prioritization of government spending in the face of rising inequality.