Housing, financial and capital taxation policies to ensure robust growth in Sweden

Extensive structural reforms since the early 1990s have strengthened the resilience of the Swedish economy to shocks. However, more needs to be done to better manage near-term risks and ensure that growth remains sustainable in the longer run. Reforming the housing market would reduce the risks associated with high house prices, ensure adequate residential investment and improve labour mobility and well-being. Clarifying the division of responsibilities in financial regulation and improving the macroprudential toolkit would reduce the risks to stability and the contingent fiscal liabilities arising from a large, concentrated banking system. Better aligning the taxation of different types of assets would make taxation more neutral.