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New tax assessed values for wind turbines mean higher property taxes, exacerbated by the government's proposal for an increased property tax rate.
In 2025, wind turbines in Sweden will receive new tax assessed values. Filing of the property tax returns was 1 November. The new tax assessed values are effective from 1 January 2025, and for six years if no changes occur to the wind turbines. Depending on the location of the wind turbine, the new assessment may result in significantly higher values and thus higher property taxes. If we also consider the increased property tax rate announced by the government in the budget proposal, property taxes could increase significantly next year. Below, we describe the changes and provide examples of their potential impact.
Property tax assessment of wind turbines
The tax assessed value for wind turbines is based on the turbine's installed capacity in kilowatt. The value of the installed capacity is recommended by the Swedish Tax Agency in a guideline. The total value of the wind turbine is determined as the product of installed capacity and the guideline value. The tax assessed value for the land constitutes 1.5% of the total value, and the value for the building (the wind turbine) constitutes 73.5% of the value, which together corresponds to 75% of the wind turbine's total value. The value for the building is then adjusted with a depreciation factor to account for theturbine's age and a factor for full-load hours if they deviate from the hourly norm.
New rules
On 1 September , the Swedish Tax Agency announced new regulations and general advice for the tax assessment. The rules include some novelties for wind turbines. Firstly, the guideline value – the factor indicating the value level – is increased from 7,100 SEK/kW to 8,600 SEK/kW, an increase of 21%. Furthermore, a new adjustment of the tax assessed value is introduced in the form of an electricity price factor to account for differences in electricity prices between the different electricity areas. The introduced electricity price factors are as follows:
|
SE1 |
-0,160 |
|---|---|
|
SE2 |
-0,192 |
|
SE3 |
0,190 |
|
SE4 |
0,348 |
In SE1 and SE2 with electricity surplus, the electricity price factor is negative, while in SE3 and SE4 with electricity deficit, the electricity price factor is positive. Additionally, the depreciation factors for power plant buildings are expanded so that the difference between the years becomes smaller, leading to slightly lower depreciations and thus higher tax assessed values.
Increased property tax rate?
In the autumn budget for 2025, the government also announced news in the energy and climate area. One of the novelties is that the property tax on wind turbines is increased to 0.5% from 1 January 2026, with the intention that all wind power companies should pay the same tax rate.
The property tax rate for wind turbines is currently 0.2%, while for other electricity production units it is 0.5%. The 0.2% rate can only be applied to a wind turbine if the difference in property tax between 0.2% and 0.5% does not cause the cap amount (200,000 EUR for a period of three tax years) to be exceeded according to the Commission's regulation on de minimis aid. If the cap amount is exceeded, 0.5% should instead be applied.
Effects of the new rules
Below, two calculations illustrate the effect the new rules will have, both on the tax assessed value and on the property tax cost. The calculations are based on a wind farm on leased land with the following conditions:
Installed capacity: 100 MW
Commissioning year: The year before the assessment year
Full-load hours (operating time)/year: 3,200-3,400
Calculation 1 – Change in tax assessed value since the general property tax assessment 2019
The table below provides an example of what the new tax assessment rules mean for the total tax assessed value of the wind farm at the 2025 tax assessment and the difference compared to the general property tax assessment 2019.
|
Tax assessed value |
Tax assessed value |
Change |
|
|---|---|---|---|
|
SE1 |
621 000 |
631 000 |
1,6 |
|
SE2 |
621 000 |
607 000 |
-2,3 |
|
SE3 |
621 000 |
895 000 |
44,1 |
|
SE4 |
621 000 |
1 013 000 |
63,1 |
Calculation 2 – Change in total property tax cost per MW over the entire investment period
The table below provides an example of what the changes in the new assessment rules mean for the total property tax cost per MW for the wind farm over the entire investment period, in our assumption 35 years. The previous rules that applied for the years 2019-2024 meant a property tax cost of 351 kSEK per MW for this wind farm.
|
kSEK/MW |
kSEK/MW |
Change |
|
|---|---|---|---|
|
SE1 |
351 |
419 |
19,4 |
|
SE2 |
351 |
396 |
12,8 |
|
SE3 |
351 |
713 |
103,1 |
|
SE4 |
351 |
804 |
129,1 |
If we also add the increase in property tax from 0.2% to 0.5% proposed in the Budget Bill for 2025, the property tax cost increases further.
|
kSEK/MW |
kSEK/MW |
Change |
|
|---|---|---|---|
|
SE1 |
351 |
578 |
64,7 |
|
SE2 |
351 |
555 |
58,1 |
|
SE3 |
351 |
827 |
135,6 |
|
SE4 |
351 |
929 |
164,7 |
The new rules mean that the property tax cost will vary depending on where in the country the wind turbine is located. The property tax cost increases for all owners, but the increase is particularly large for owners in southern Sweden.
Owners of wind farms have been limited to the allowed de minimis aid for state aid, which amounts to 200,000 EUR over a three-year period. Thus, it is primarily owners of smaller wind farms or older wind farms who have been able to fully utilize the lower tax rate. Over an entire investment period, however, the increase has material effects as the tax assessed value decreases as the wind turbines age. a
It should be noted that the total property tax to be paid will be adjusted at each general property tax assessment every six years during the investment period based on the then applicable value levels, but the example provides a good indication of the significant effects the combination of the new assessment rules and the increased property tax will bring.
Conclusion
The changed rules mean that many wind turbines will receive significantly increased tax assessed values from 1 January 2025, with increased property tax as a direct consequence. If the announced changed property tax rate is also introduced from 1 January 2026, many wind turbines will face a substantial property tax blow in the coming years.
A Swedish version of this article is available here
Authors
- Jesper Käck – Senior Manager – Corporate Tax – 072-217 39 51
- Karolina Silvén – Director – Property Tax Assessments & Property Tax – 070-830 37 56
- Veronica Nensén – Associate Partner – Corporate Tax – 073-023 29 27
Summary
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