Denmark Property Tax Guide (Ejendomsskat, Grundskyld, Stempelafgift)

Types of Danish Property Taxes

Denmark imposes several distinct taxes on property. Understanding each one is critical for budgeting as a homeowner or investor.

• — Ejendomsværdiskat: An annual tax on the value of your owner-occupied property (parcelhus, ejerlejlighed). The rate is approximately 1% of the property value up to roughly 9,000,000 DKK, and 3% on the portion above that threshold. This tax applies to primary residences only.
• — Grundskyld: A municipal land tax based on the land value of your property (grundværdi). The rate varies by municipality — typically between 16‰ and 34‰ (per mille) of the land value. It is billed quarterly and is not deductible from income tax.
• — Stempelafgift (Stamp Duty): A one-time tax on property purchase. For individuals, the rate is 0.6% of the purchase price. For companies, it is 1.5%. This is paid to the state as part of the title transfer process.
• — Tinglysningsafgift: A registration fee for mortgage deeds (pantebrev). It costs approximately 1,660 DKK plus 0.6% of the mortgage amount. This is paid to the Land Registry (Tinglysningsretten).

These taxes apply to freehold properties (ejerbolig). Cooperative housing (andelsbolig) has different rules — you pay a monthly fee that includes the co-op’s property taxes indirectly. For detailed guidance on financing, see our mortgage guide →.

Buying Property — Purchase Costs and Taxes

When you buy a property in Denmark, you face several upfront costs beyond the purchase price. Budgeting for these is essential:

• — Stempelafgift (Stamp Duty): 0.6% of the purchase price for individuals, 1.5% for companies. This is paid when the deed (skøde) is registered.
• — Tinglysningsafgift: ~1,660 DKK + 0.6% of each mortgage amount. If you take two mortgages (e.g., realkreditlån + banklån), you pay the fee for each.
• — Realkreditinstitut fees: Establishment fees for the mortgage loan, typically 2,000-5,000 DKK per loan.
• — Lawyer/conveyancer: Legal fees for reviewing the purchase agreement and handling the transfer. Expect 10,000-25,000 DKK.
• — Building inspection: Optional but recommended (tilstandsrapport, el-installationsrapport). Costs 5,000-10,000 DKK.
• — Due diligence costs: Property report (ejerboligrapport), energy certificate (energimærke), and any surveys.

Total upfront costs typically range from 3% to 5% of the purchase price for a standard freehold property purchase. These costs are not tax-deductible. However, the mortgage interest you pay is deductible against your capital income (field 42 on the forskudsopgørelse and årsopgørelse). For detailed guidance on deductions, see our tax deductions guide →.

Selling Property — Capital Gains and Taxation

The tax treatment of property sales in Denmark depends on the type of property and how long you have owned it. Understanding these rules can save you significant tax:

• — Primary residence (parcelhus, ejerlejlighed): Gains are generally tax-free if you have lived in the property for at least 2 of the last 5 years. This is the parcelhusregel (owner-occupied exemption). There is no upper limit on the gain amount.
• — Secondary/holiday home (sommerhus): Gains are fully taxable at 42% (capital gains rate). No tax-free allowance. The tax applies to the full gain regardless of ownership period.
• — Rental property (udlejningsejendom): Gains are taxable as capital gains. The rate depends on the holding period and whether you are an individual or a company. Individuals pay 42% on gains above the annual tax-free allowance.
• — Beregnet ejendomsværdiskat: SKAT calculates an assessed property value (offentlig ejendomsvurdering) each year. This is used for the annual ejendomsværdiskat, not for capital gains calculation. The actual sale price determines the gain.

If you are selling a primary residence at a loss, the loss is not deductible against other income. Losses on secondary homes and rental properties may be deductible under certain conditions — consult a tax advisor for your specific situation.

Holiday Home Tax (Sommerhus Rules)

Holiday homes (sommerhuse) are subject to stricter tax rules than primary residences. The Danish tax system intentionally disfavours second homes to encourage primary residence ownership and limit holiday home speculation.

Key rules for holiday homes:

• — Higher grundskyld: Many municipalities apply a higher land tax rate to sommerhuse compared to primary residences.
• — Full capital gains tax: Profits on sale are taxed at 42% with no tax-free allowance. This applies regardless of how long you have owned the property or whether it was used personally.
• — Ejendomsværdiskat: Holiday homes are subject to ejendomsværdiskat at the same rate as primary residences (1% up to ~9M DKK, 3% above), but with no exemption for short-term use.
• — Rental income: If you rent out your sommerhus (e.g., through platforms like Airbnb, Novasol, or DanCenter), the rental income is taxable. You can deduct operating expenses against the rental income, but personal use days are not deductible.
• — Limitation on personal use: If you rent out your sommerhus commercially, you must limit personal use to avoid being treated as a personal residence. The specific rules depend on the type of rental arrangement.

Holiday home ownership requires careful tax planning. The combination of higher annual taxes, full capital gains taxation, and complex rental income rules makes it advisable to consult a Danish tax professional before purchasing a sommerhus.

Foreigners Buying Property in Denmark

Foreign nationals can buy property in Denmark with relatively few restrictions, though certain rules apply:

• — No special approval needed: Since the liberalisation of Danish property law, EU/EEA nationals and residents can buy property freely. Non-EU/EEA residents may need a permit from the Ministry of Justice, but this is rarely required for those with residency.
• — Danish bank account: You need a Danish bank account (NemKonto) for property tax payments and mortgage transactions. Most banks require a CPR number.
• — Danish real estate agent: While not legally required, using a Danish real estate agent is strongly recommended for navigating the purchase process, property valuations, and tax implications.
• — Tax treatment: Foreign residents pay the same property taxes (ejendomsværdiskat, grundskyld, stempelafgift) as Danish residents. However, if you are not a full Danish tax resident, your overall tax liability may differ — see our personal tax guide →.
• — Withholding tax on sale: If a non-resident sells property, SKAT may require a 25% withholding of the sale price to cover potential tax liability. This is refundable upon filing a Danish tax return.

Foreign buyers should also consider the currency risk (DKK is pegged to EUR but fluctuates against other currencies) and the impact of double taxation treaties on rental income and capital gains. For those considering relocation, see our moving tax guide →.

Adjustments in the Tax Assessment Notice

Your property taxes are pre-filled on your årsopgørelse (tax assessment notice) based on SKAT’s public property valuation and municipal rates. It is essential to verify these figures every year.

Key fields on the årsopgørelse related to property:

• — Field 42 (Capital Income): This is where mortgage interest paid appears as a negative amount (deductible). Cross-check against your mortgage statements from your realkreditinstitut.
• — Field 47 (Property Value): The offentlig ejendomsvurdering used for ejendomsværdiskat. If this value is incorrect, your annual property value tax will be wrong.
• — Field 48-51 (Share Income): Not directly property-related, but if you own property through a company (e.g., an ApS holding real estate), dividend income may appear here.

If you disagree with SKAT’s property valuation, you can appeal to the Ejendomsvurdering department within SKAT. The valuation significantly affects your annual tax bill, so it is worth reviewing carefully. For a complete guide to reviewing and correcting your assessment notice, see our tax assessment notice guide →.

FAQs

Is mortgage interest deductible in Denmark?

Yes. Mortgage interest paid to a realkreditinstitut or bank is deductible against your capital income (field 42 on the forskudsopgørelse and årsopgørelse). The deduction reduces your overall tax liability. Interest on both primary residence and holiday home mortgages is deductible. However, the deduction is at the capital income rate (approximately 38% depending on your tax bracket), not at your marginal income tax rate. You claim the deduction by entering expected interest payments in your forskudsopgørelse.

What taxes do I pay when buying a property in Denmark?

You pay stempelafgift (stamp duty) of 0.6% of the purchase price for individuals (1.5% for companies), plus tinglysningsafgift of approximately 1,660 DKK + 0.6% of each mortgage amount. Additional costs include legal fees (10,000-25,000 DKK), building inspection (5,000-10,000 DKK), and mortgage establishment fees. These upfront costs typically total 3-5% of the purchase price and are not tax-deductible.

Do I pay capital gains tax when selling my home in Denmark?

If it is your primary residence and you have lived there for at least 2 of the last 5 years, the gain is tax-free. If you sell a holiday home or secondary residence, the gain is taxable at 42%. Rental properties and investment properties are also subject to capital gains tax at 42% for individuals, with certain allowances based on holding period. Losses on secondary homes may be deductible in limited circumstances.

How is grundskyld calculated?

Grundskyld is calculated by multiplying your property’s land value (grundværdi) by the municipal grundskyldspromille (rate per 1,000 DKK). The rate varies by municipality. For example, if your land value is 500,000 DKK and your municipal rate is 20‰, your annual grundskyld is 10,000 DKK. The tax is billed quarterly by the municipality. Recent property valuation reforms have changed how SKAT assesses land values, so your grundskyld may change from year to year.

Can foreigners buy property in Denmark?

Yes, with few restrictions. EU/EEA nationals can buy property freely. Non-EU/EEA nationals with Danish residency can also buy without special permission. Non-residents may need a permit from the Ministry of Justice, though this is rarely an issue in practice. All buyers must have a Danish bank account and CPR number for tax purposes. A 25% withholding tax may apply to non-resident sellers. See our moving tax guide → for more on residency rules.