Wealthy Stockholm suburb hit with surprise tax increase

While the other two designations may still hold today (as does its designation of being home to a higher concentration of Brits than anywhere else in Sweden), the latter is no more. 

 

Taxpayers in Danderyd have been hit with a new income tax increase that will see them paying an extra 1.4 kronor in taxes for every 100 kronor they earn beginning next year. The average annual income in the municipality was 517,800 kronor in 2017.

 

With the tax hike, Danderyd will lose its status as one of Sweden's five least-taxed municipalities. The tax rate in the ritzy suburb will climb to 31.03 percent in 2020, a significant jump from its current 29.63 rate and much closer to the national average of 32.19 percent. 

 

In Sweden, local tax rates consist of two parts: taxes paid the municipality (kommun) in which one lives and taxes paid to the region (landsting). 

 

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While the tax increase will kick Danderyd off the list of the municipalities with the lowest tax rates, it still has quite a way to go before approaching Sweden's highest municipal tax rate. That honour goes to Dorotea Municipality in Lapland, where residents have a 35.15 rate. 

 

The Danderyd tax hike is a result of the Moderate-led municipality board's policies, which according to broadcaster SVT would result in a 220 million kronor deficit by the end of this year if nothing is done.

 

Danderyd mayor Hanna Bocander warned earlier this year that because the suburb was in "a serious economic situation", residents there "must prepare themselves for the consequences". 

 

In a further effort to fill the budget hole, local officials are also hoping to bring in an additional 60 million kronor through cost-cutting and efficiency improvements.