STOCKHOLM, Aug 29 (Reuters) - Welfare spending in Sweden will rise by 1.7 billion crowns ($200 million) next year under a deal agreed between the country minority government and an opposition party, daily Svenska Dagbladet wrote.
The deal over the 2016 budget between the government and the Left Party will also leave mortgage tax relief and company tax unchanged and see no hikes in income taxes for those earning up to 50,000 crowns a month, the newspaper wrote.
It cited a source with knowledge of the negotiations.
Welfare spending will include free healthcare for people over 85 and free dental care for the under 23s.
The minority Social Democrat and Green Party government needs backing from the Left Party to push through its budget.
The government has already said it will spend 10 billion crowns a year on measures to increase employment, including investments in housing and infrastructure, improving the business climate, and on adult education.
Finance Minister Magdalena Andersson has said all new spending must be financed by tax hikes or cost savings.
The government plans to raise payroll taxes and taxes on some savings products and fuel and to lower rebates on household services
The budget is due to be presented Sept. 21. ($1 = 8.4555 Swedish crowns) (Reporting by Simon Johnson; Editing by John Stonestreet)