Global Property Guide

Financial Information for Residential Property Buyers


Taxes are moderate in Denmark

Last Updated: July 20, 2018

INDIVIDUAL TAXATION

Nonresidents are taxed on their income from Danish sources. Married couples are taxed separately.

INCOME TAX

Nonresident individuals are taxed at the state and municipal levels. A health contribution tax is also being imposed on taxable income.

State Income Tax

The taxable income is generally computed as the sum of personal income and capital income, less general deductions.

STATE INCOME 2017

TAXABLE INCOME, DKK (€) TAX RATE
Up to 48,913 (€6,574) 0%
48,913 - 521,304 (€70,068) 8%
Over 521,304 (€70,068) 15%
Source: Global Property Guide

STATE INCOME 2016

TAXABLE INCOME, DKK (€) TAX RATE
Up to 47,826 (€6,428) 0%
47,826 - 507,935 (€68,271) 8%
Over 507,935 (€68,271) 15%
Source: Global Property Guide

STATE INCOME 2015

TAXABLE INCOME, DKK (€) TAX RATE
Up to 47,174 (€6,341) 0%
47,174 - 499,130 (€67,087) 8.08%
Over 499,130 (€67,087) 15%
Source: Global Property Guide

RENTAL INCOME
The taxable rental income can be computed in two ways:

  • Income less related costs such as maintenance costs, depreciation and property taxes
  • Income less an allowance of DKK7,000 (€941); 40% of the result is deducted in lieu of all deductions and costs

The resulting taxable income is then taxed at progressive rates.

CAPITAL GAINS
Taxable capital gains include gains on immovable property, debts and debt claims if they are attributable to immovable property.

The taxable capital gains are usually computed by deducting acquisition costs and transaction costs from the selling price. The capital gains are then included in the aggregate income and taxed at progressive rates.

According to the detached house rule, profits from selling residential properties measuring less than 1,400 sq m and which have served as the owner´s primary residence either fully or partially throughout the ownership period are exempt from taxation.

Municipal Income Tax

Nonresidents pay a municipal income tax at a flat rate of 24% on their taxable income.

Health Care Tax

The health care tax is charged at a flat rate of 4% of the taxable income.

PROPERTY TAX


National Property Tax

A national property tax is levied on the value of properties in Denmark. The taxable value is the lowest of:

  1. The assessed value as of 01 January of the current tax year;
  2. 105% of the assessed value as of 01 January 2001;
  3. The assessed value as of 01 January 2002.

The tax rate is 1% of the taxable value up to DKK3,040,000 (€408,602) and 3% on the value in excess of the limit.

NATIONAL PROPERTY TAX

PROPERTY VALUE, DKK (€) TAX RATE
Up to 3,040,000 (€408,602) 1%
Over 3,040,000 (€408,602) 3%

If the property was acquired before 01 July 1988, the applicable rates are generally reduced by 0.5% and 2.8% respectively.

Municipal Real Estate Tax

The municipal real estate tax rate is levied on the land value. The tax rate is between 1.6% and 3.4%, varying depending on the location

 

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