The government is expected to present its budget proposal for next year tomorrow, and reliable sources indicate that a popular tax deduction is set to be reintroduced. The “handyman deduction” (håndværkerfradraget), which was abolished three years ago, is on track for a comeback. In addition to the handyman deduction, the government also plans to enhance the service deduction (servicefradraget). In total, 400 million Danish kroner (approximately $58 million) have been allocated for these initiatives, with 300 million kroner specifically earmarked for the handyman deduction.

Earlier this month, the Liberal Party (Venstre) signaled their desire to reinstate the deduction. During the party’s summer group meeting in August, leader Troels Lund Poulsen stated that the abolition of the deduction was a mistake. He emphasized the importance of reintroducing the deduction in the budget and highlighted their readiness to allocate several hundred million kroner to achieve this. According to Poulsen, the deduction has the potential to assist Danish homeowners with energy upgrades and climate-proofing their properties, particularly in areas with high groundwater levels.

The Liberal Party had the handyman deduction as a central focus of their election campaign in 2022, following the Social Democrats’ (Socialdemokratiet) decision to abolish the scheme under Prime Minister Mette Frederiksen. During the COVID-19 crisis, the deduction was temporarily enhanced to support the labor market but was later removed due to an overheating in demand for tradespeople.

The handyman deduction was originally introduced as a pilot scheme in 2011 and became a permanent part of the budget in 2018. If all goes as planned, the deduction will once again be available to Danish homeowners from 2025.