The tax deduction for home improvements, the “håndværkerfradrag”, was scrapped in 2022 by the minority Social Democratic government of the time, backed by the left wing parties Red Green Alliance, Social Liberals, Socialist People’s Party, and Alternative.

At the time, the parties argued that the subsidy was contributing to an “overheating” of the construction and housing markets.

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Now part of a centrist coalition government with the Social Democrats, the centre-right Liberal party says the deduction should be reinstated.

“In 2021, the government of the time [decided to scrap] the home improvement deduction which helped Danish families to do things like renovate their house to be more energy efficient,” leader Troels Lund Poulsen said at a press briefing.

“We were against scrapping it and still think it was the wrong decision,” he said.

A new version of the deduction could be focused on energy efficiency and climate mitigation, he also said.

Some 550,000 people made use of the deduction in 2021 according to tax ministry figures. The deduction could be used on expenses paid to builders for home improvements including energy and climate adaptations.

It was scrapped after demand became so high that there was no longer enough supply for the services.

Poulsen said he wanted the deduction to help families improve energy consumption in their homes and protect them against climate related damage such as flooding in vulnerable areas.

“We are prepared to set aside several hundred million [kroner] to get this done so that Danish homeowners can future-proof their property,” he said.