Household tax credit raised, sports and culture benefit increased

The household tax credit will increase from 35% to 40% for services purchased from companies, and from 13% to 15% for wages paid. The aim of the change is to strengthen household demand for services and stimulate the construction sector.

The Ministry of Finance announced the Government Bill on Thursday.

The ministry says the laws will enter into force as soon as possible after parliamentary consideration. The changes are intended to apply retroactively from the start of 2026.

Survey on the impact of the cuts

Earlier this week, Suomen Yrittäjät, the Finnish SME association, published a survey on the household tax credit, commissioned jointly with several other organizations. The cut to the household tax credit that entered into force at the start of 2025 affected consumer purchasing behaviour and companies’ staffing decisions. The credit was cut from the start of 2025, reducing the maximum amount and credit rate while increasing the taxpayer’s excess.

The survey shows that consequences of the cut were seen quickly. Among those who had used the credit in the past five years, 31% reduced their service purchases after the cut and 8% stopped them altogether. Only a quarter of respondents kept their purchases at the same level.

Purchases were cut most in household work and cleaning services, where 43% reported reducing spending. Painting and surface renovation work saw the second largest cuts.

The cut also hit companies providing these services hard. Verian conducted a separate survey among companies offering services covered by the household tax credit. Of those, 72% said the cut had reduced their order book significantly or to some extent. As many as 83% of companies considered the household tax credit in its current form somewhat or entirely inadequate.

Thirty-one per cent of companies reduced jobs and 20% furloughed workers as a result of the cut. Dismissals were concentrated in cleaning and care services, while furloughs were more common in construction and building services.

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