Guide to Property Taxes in Denmark

Nonresidents are generally subject to Danish taxation on specified Danish-source income, including income derived from real estate situated in Denmark. Individuals are generally taxed separately.

Income Tax

Denmark imposes both state and municipal income taxes. From 1 January 2026, the state income-tax system consists of a bottom-bracket tax, middle-bracket tax, top-bracket tax and additional top-bracket tax.

The bottom-bracket tax is 12.01%.

A middle-bracket tax of 7.5% applies above the relevant statutory threshold. For positive net capital income, the 2026 threshold is DKK 55,000.

For personal income, a further top-bracket tax of 7.5% applies above DKK 777,900 after labour-market contributions, while an additional 5% top-bracket tax applies to personal income exceeding DKK 2,592,700.

Municipal income tax is imposed in addition to state income tax. The applicable rate varies according to the municipality.

Special rules apply to individuals subject only to limited Danish tax liability, and the precise effective tax burden depends on the nature of the Danish-source income and the deductions and allowances available to the taxpayer.

Rental Income Tax

Rental income derived by a nonresident individual from Danish real estate is generally taxable in Denmark.

Where an investment property that the owner does not occupy is rented out, the rental income is generally reported under the applicable Danish rental or business-income rules. Qualifying expenses associated with generating the rental income may generally be deducted when determining taxable profit.

Depending on the circumstances, deductible expenses can include property taxes, maintenance and operating expenses, administration costs and certain financing expenses.

The resulting taxable rental income is subject to the applicable Danish income-tax regime. For property investors, the distinction is important because SKAT treats rental income from a home the owner doesn't occupy as capital income, and it expressly allows relevant operating/property expenses under the applicable rental rules.

In our example with three different income levels, a 30% maximum deduction for costs was applied to achieve the displayed income tax rates.

Capital Gains Tax

Nonresident individuals may be subject to Danish tax on gains from the disposal of real estate situated in Denmark.

A taxable gain is generally calculated according to the Danish Real Property Gains Tax Act, taking into account the property's acquisition cost, disposal proceeds and qualifying adjustments and expenses.

Taxable gains on real estate held as a private investment are generally treated as capital income and subject to the applicable Danish income-tax rules rather than a separate flat capital gains tax.

An important exemption can apply to qualifying owner-occupied residential property under Denmark's principal-residence exemption. Where the statutory conditions are satisfied, a gain on the sale of a home that was genuinely used as the owner's residence during the ownership period may be exempt from tax.

Accordingly, an investment property that has been continuously rented out and has not qualified as the owner's residence will generally not benefit from this exemption.

Corporate Taxation

The standard Danish corporate income tax rate is 22% of taxable profit.

Rental income and taxable gains from Danish real estate earned by a company are generally included in taxable corporate income. Qualifying business expenses incurred in generating the income may generally be deducted when calculating taxable profit.

Foreign companies may also be subject to Danish corporate income tax on specified Danish-source income, including income attributable to Danish real estate or a Danish permanent establishment, subject to domestic law and applicable double-tax treaties.

Property Buying Costs and Taxes in Denmark

Transaction Costs

Property Holding Tax

Denmark has two principal recurrent property taxes: property value tax (ejendomsværdiskat) and land tax (grundskyld).

Property Value Tax

Property value tax is a national tax primarily applicable to homes that are available for use by their owners. A property that is commercially rented out and is not available to the owner is generally not subject to property value tax for the rental period.

For 2026, property value tax is calculated on the applicable assessed property value, generally after a 20% reduction in the public property assessment used for the calculation.

The 2026 rates are:

• 0.51% on the applicable property value up to DKK 9,007,000.
• 1.4% on the portion exceeding DKK 9,007,000.

Accordingly, a nonresident investor who owns a Danish property that is rented out commercially throughout the year and is not available for the owner's private use will generally not pay property value tax on that property.

Land Tax

Rental properties can nevertheless be subject to land tax (grundskyld). Land tax is levied on the assessed value of the land rather than the total value of the land and buildings.

The applicable land-tax rate is determined by the municipality in which the property is situated and therefore varies according to location. Consequently, there is no single nationwide percentage that can be used to calculate the annual land tax for all Danish investment properties.