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Summer houses in Denmark: What are the rules and when can you live in them?

Many people in Denmark spend their holidays living in summer houses, but what are the rules for staying at the properties around the calendar?

Summer houses in Denmark: What are the rules and when can you live in them?
Housing in municipal summer house zones cannot generally be lived in year-round. File photo: Henning Bagger/Ritzau Scanpix

Summer houses are properties in which residence is not usually permitted year-round. Rules preventing permanent use are in place to ensure summer house areas remain recreational in nature; to limit new construction in valuable and uninhabited coastal areas; and to protect natural landscapes from wear and tear.

Owners of homes which are not summerhouses (helårsboliger) are generally required to ensure that their properties are lived in for at least 180 days per year, either by themselves or by tenants. This is known in Danish as a bopælspligt, literally “obliged residence”. Although it’s not actually mentioned in Danish law it is practiced due to tax rules.

Local authorities decide through zoning laws (lokalplaner in Danish) which housing within their municipal limits are required to comply with bopælspligt rules.

The purpose of these rules is, in part, to prevent unhindered property speculation.

Summer houses are not generally built with full-time residence in mind. As such, they are less isolated and not as well heated as regular housing. That means energy bills will be higher for the time they are used, especially if this is not during the summer.

When am I allowed to live in a summer house?

As well as being required to live in your regular house for at least 180 days of the year due to the bopælspligt, local authorities do not generally permit residence in summer houses in the winter months, meaning from November 1st-March 1st.

This does not mean that summer houses may not be used at all during the winter, but longer stays are not allowed.

Are there any exemptions?

Some circumstances provide exemptions that allow summer houses to be used as permanent residences. There are three main categories.

These are: 1) the summer house was legally permitted to be used as a permanent residence when the area in which it was located was made a summer house area under a zoning plan, and the right to permanent use has not yet lapsed. 2) The local municipality has given the summer house owner special permission, 3) The owner is retired and has owned the summer house for at least a year.

Special permission can also be given by municipalities in a range of circumstances, including owners or leaseholders at essential local businesses like supermarkets who need to live nearby; or people who find that living in summer houses can ease serious or long term health conditions. Applications for special permission (dispensation) are made with the relevant municipality.

When retired people are given permission to live in summer houses, their close families can live with them and may also continue to do so if the person with the special dispensation passes away. Once the family moves, the special dispensation lapses.

It should also be noted that the summer house must be in reasonable condition for the local authority to permit permanent use. A house in very bad condition can be declared unfit for year-round residence (helårsbeboelse) by the authority. A surveyor’s report is often advisable for people who are considering moving permanently into their summer house.

Sources: Borger.dk, Aarhus Kommune

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PROPERTY

EXPLAINED: Denmark’s new property tax rules from 2024

New property tax rules (boligskatteregler) take effect in Denmark in 2024. How will they affect homeowners and first-time buyers?

EXPLAINED: Denmark’s new property tax rules from 2024

The new tax rules, which will impact property value tax rates (ejendomsværdiskattesatser) and land value tax (grundskyld), were originally ratified by the previous government in a 2017 bill. In general, they mean the rates for both of the above property taxes will fall in most municipalities, according to the Danish tax ministry.

A public real estate appraisal (ejendomsvurdering) forms the basis for taxation of your property. According to the tax ministry, many homeowners will find that new appraisals issued from September 2021 are higher than preceding valuations from 2011 and 2012. That is partly due to increasing house prices in recent years.

In order to avoid much higher property taxes as a result of higher valuations in the public real estate appraisals, the 2017 political agreement secured a reduction of the two forms of property tax, effective from 2024.

Homeowners who appear to be facing higher property taxes due to the new appraisals – even though tax rates will be reduced – can be eligible for a tax subsidy. This can occur in cases where a property has seen a large increase in its valuation.

In short, the new tax rules will not result in taxes for existing homeowners in 2024 that are higher than they would have been if the current rules (still in effect in 2022 and 2023) were to remain in place.

However, the tax subsidy mentioned above does not apply to new homeowners from January 1st 2024. This is because first-time buyers will be expected to “plan their finances in accordance with the new tax rules,” the ministry states.

This could have a knock-on effect on the housing market, according to financial media Finans, which wrote in November 2021 that people buying apartments would be likely to demand reduced prices as 2024 approaches, to offset the higher taxes they are likely to pay.

READ ALSO: Danish apartment sales cool to eight-year low

An analysis by Finans and Nykredit showed that apartment prices in major cities, particularly in and around Copenhagen as well as in Aarhus and Odense, will typically have to fall by around 5-10 percent for total costs for now buyers – mortgage plus tax – to be unchanged compared to the outgoing rules.

The new rules and subsequent increased taxes will hit first-time (in 2024) buyers of apartments hardest, according to Finans. That is because many buyers will not be able to afford the same mortgage they previously could, due to the higher property taxes.

One reason apartments are more likely to get tax increases under the new rules is that the valuation appraisal system left them subject to lower property tax relative to houses.

“Apartments have been too lightly taxed for many years because the land under them is massively undervalued compared to appraisals of detached house land,” Mira Lie Nielsen, housing economist at Nykredit, one of Denmark’s major banks and the country’s largest mortgage lender, told Finans last November.

People buying apartments before 2024 could also push prices down knowing they risk making a loss if they sell shortly after the tax reform takes effect.

From 2024 onwards, the two property taxes – ejendomsværdiskattesatser and grundskyld – will be pegged to appraisals of the property and land value such that if these fall in valuation, so will the property tax.

If the valuation of the property, and thereby the property tax, increases after 2024, homeowners can fix the rate of (indefryse) their taxes by postponing payment of a part of the property tax. The frozen tax payment becomes due (and is calculated) when the property is sold. Alternatively, the increased taxes can be paid in instalments.

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