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RENTING

Denmark wants to build 20,000 new affordable rental homes

The government plans to increase the amount of subsidised (almene) housing in Denmark, in a move it says will provide a more diverse population in larger cities.

Prime Minister Mette Frederiksen discussed Copenhagen's lack of affordable housing in her opening speech to parliament.
Prime Minister Mette Frederiksen discussed Copenhagen's lack of affordable housing in her opening speech to parliament. Photo: Liselotte Sabroe/Ritzau Scanpix

The proposal will set out a trebling of current construction of subsidised housing in the four largest cities – Copenhagen, Aarhus, Odense and Aalborg.

That will make it easier for first-time buyers to find rental housing in large cities while saving for a deposit, the government says.

Prime Minister Mette Frederiksen announced the plan during her speech at the reopening of parliament on Tuesday.

“We need more affordable housing. That’s why the government wants to make it possible to build more than 20,000 more subsidised homes over the next 10-15 years. Most will be built in the larger cities,” Frederiksen told parliament.

The PM referred to high apartment prices in Copenhagen neighbourhood Nørrebro in her speech. Three-room apartments in the area are currently listed with estate agents at 4-6 million kroner.

That makes it “very difficult” for first time buyers to get on the property ladder in the area, Frederiksen said.

“Denmark’s capital is a city where people actually still live their lives. That’s good. And when you look around the world that’s in no way a given. But there’s a problem. A big problem. Many people can no longer afford to live in the capital that belongs to all of us,” she said in the parliament speech.

It is important to note the difference between the two main types of rental housing in Denmark: private rentals and almene boliger (literally, ‘general housing’), a form of subsidised housing. Frederiksen was referring to the latter in her announcement of the plans on Tuesday.

For almene boliger, local municipalities put up 10 percent of building costs and in return have the right to decide who is allocated one in four available apartments, enabling them to provide housing to municipal residents who need it. The housing therefore plays a role in the social housing provision.

This type of housing is normally managed by a boligforening or housing association. Rent goes towards costs of running the housing and to pay off the housing association’s loans, which means property owners aren’t profiting from rents and prices are controlled.

Private rental prices are dependent on market forces to a greater extent.

READ ALSO: How the cost of renting an apartment in Copenhagen compares to other cities in Denmark

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MONEY

Boligstøtte: Who can claim Denmark’s national rent subsidy?

Residents of Denmark can in some cases apply for ‘boligstøtte’ (“housing support”), a reduction on their monthly rent.

Boligstøtte: Who can claim Denmark's national rent subsidy?

What is boligstøtte? 

Boligstøtte is a tax-free sum which people who live in rented housing can – in some cases – qualify for. It provides a subsidy to rent.

The subsidy is available to anyone who rents their home, provided the home meets certain criteria and the household income is under a certain level.

For example, your rental home must have its own kitchen (which would rule out student housing with shared kitchens, termed kollegier in Danish) and you must live permanently in the property.

Homeowners can also be entitled to apply for boligstøtte under certain circumstances. In such cases, the boligstøtte is a loan and not a subsidy, however.

The size of the subsidy – the amount of money you receive each month – depends on the overall income of the household (the total of the incomes of all wage earners at the address), the number of children and adults who live at the address, the amount of rent and the size of the house or apartment.

Boligstøtte is paid out on the first working day of each month.

How do I know if I’m entitled to boligstøtte?

Most people can apply for boligstøtte if they live in rented housing. There are a few living situations that can disqualify you, such as if you live with the owner of the property (including as a tenant) or if you own the property yourself and rent part of it.

You can, however, apply for the subsidy if you live in a property owned by your parents and pay rent to them (known as a forældrekøb – “parent purchase” – in Danish).

You can also apply for boligstøtte if you are sub-letting your house or flat, although the person sub-letting to you might have to change their address in order to avoid their income being taken into account in your application.

People who own their homes can receive bolistøtte (as a subsidy, not as a loan as detailed above) if they receive the state pension folkepension, or disability pension, førtidspension.

How and where do I apply?

You can submit an application via the borger.dk website at this link. The application platform will ask you to submit a rental contract and other documentation for your claim to be processed.

If you’re applying after moving to a new address, you must have registered your change of address with the national personal registry prior to applying. This can be done here. If you apply within 30 days of moving, the subsidy will be effective from the date you moved in. Otherwise, it will count from the first day of the following month from when you submit your application.

The processing time for the application can be up to seven weeks. You’ll receive a confirmation of your application via your Digital Mail inbox, and you will also receive notification here once the application has been processed.

By how much can I reduce my rent?

This depends on the various factors on which your eligibility is calculated – for some, you will not qualify to receive any subsidy at all.

There are five criteria upon which your eligibility – and the amount you receive – is calculated. They are the income of the household; the savings or fortune of people in the household; number of children and adults living at the address; size of the home (in square metres) and amount of rent paid.

You will receive more money if you have more children. For example, people who live in rented homes and are not receiving the state pension can get up to 1,039 kroner per month if they have no children; up to 3,654 kroner per month if they have 1-3 children; and up to 4,568 kroner per month if they have 4 children or more.

The borger.dk website has a tool on which you can estimate your boligstøtte here.

Source: borger.dk

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