What are the rules if you want to Airbnb your home in Denmark?
Many people in Denmark to rent out their homes while they go away, particularly using the platform Airbnb. But if the rental is not approved by a landlord or housing association, it can lead to you having to give up your tenancy. These are the rules to be aware of.
Subletting or renting out your home on Airbnb is a popular way to earn some extra money, especially during holiday seasons. More than 70,000 people rented out their homes in Denmark through the service in 2019, according to Airbnb. But if you want to join the trend, the type of accommodation you're living in can be a deciding factor on whether it is legal.
Owned home (Ejerbolig)
If you want to rent out your owner-occupied apartment on Airbnb, you are generally free to do so but it is worth first checking with your owner's association (ejerforening).
If a property is used exclusively for short-term rentals, similar to hotel operations, special permits are required including relation building permits, fire safety measures, and other relevant requirements, Søren Saaby Hansen, a lawyer from the firm Øens, told The Local.
Cooperative home (Andelsboligforening)
This is property owned by a cooperative association and its members. Individual residents do not own their apartments but have exclusive rights to it after buying, so it is considered a combination of a condominium and a rental property.
In housing cooperatives, the association itself establishes the rules for rental. So if the cooperative's bylaws state that the apartments can only be used by members, then it is not legal for members of the housing cooperative to rent out their apartments, whether on regular long-term leases or through platforms like Airbnb, Hansen said.
If the association's bylaws do not contain a specific rule against renting out the apartments via Airbnb or similar platforms, members can generally rent out their apartments. It's worth noting that the association can limit the number of days members can rent out their home.
"As a general rule, owner-occupied properties, including houses, townhouses, and condominiums, can be freely rented out for private residence purposes. While there may be specific restrictions on residential rentals in the bylaws of condominium associations, such cases are relatively rare," Hansen added.
Rented home (Lejebolig)
If you live in a rental apartment or house, it is unlikely you will be allowed to sublet it on Airbnb.
According to the Tenancy Act, only those who signed the lease can live in the property and you cannot entrust the lease to anyone other than household members without the landlord's permission.
A violation of these rules can be considered a breach of the contract and may lead to termination of the tenancy agreement, Hansen explained.
In a judgment from the Housing Court in Frederiksberg, it was ruled that private landlords can cancel a lease if the tenant sublets their apartment on Airbnb repeatedly for short periods.
The rules for subletting longer-term are different and can be found in Sections 157 and 158 of the Danish Tenancy Act (Lejeloven).
Section 157 applies to situations where a tenant sublets a portion of their home. Here, the tenant has the right to sublet up to half of the apartment's living space, as long as the number of people living in the tenancy is not more than the number of rooms (which means living rooms and bedrooms) and the tenant is still living there. In order to do this, you need to have a written sublease agreement drawn up and present it to the landlord before the sublease begins. This does not fall under Airbnb sublets, which are more short-term.
The subletting of the entire property is regulated by Section 158 of the Danish Tenancy Act which allows you to sublet your tenancy for up to two years if there is a good reason, based on the fact you temporarily do not need the accommodation, such as studying abroad, illness, or business travel.
In smaller properties consisting of 12 or fewer residential apartments, the landlord may oppose the subleasing arrangement if the total number of occupants would exceed the number of rooms, or if the landlord has other reasonable grounds to object to the subletting.
How much can I charge on Airbnb?
Due to a change to the rules in the Tenancy Act in 2016, landlords renting out properties for short-term holiday and leisure purposes can now decide the amount they want to charge. The tenant cannot later complain to the local rent board about the amount of the rent or other financial matters surrounding the letting.
How long can I rent out my home on Airbnb?
In 2018, parliament set a cap for people renting out their home on Airbnb to a maximum of 70 days. Individual municipalities may decide to allow short-term rentals for up to 100 days per year.
READ ALSO: In world first, AirBnB to report income directly to Danish authorities
However both the housing owners' associations and housing cooperatives can overrule this and set the cap to lower.
Am I covered by insurance if I rent out my home?
As a landlord through Airbnb, you are covered by their host guarantee which covers up to 5,000,000 kroner for damage to the home that a tenant may cause. But it is not an insurance policy and does not cover stolen items, for example, or wear and tear, which is why it is a good idea to get your own deposit from your guests.
"Regardless of whether you are a tenant, homeowner, or shareholder in a housing cooperative, you are generally responsible for the individuals you grant access to your home, including during subletting. It is therefore crucial to conduct proper screening of prospective subtenants," Hansen warned.
"In extreme cases where the behaviour of guests is severe enough, the landlord may be entitled to terminate the tenancy, even if the tenant had obtained permission to sublet from the landlord.
"In housing cooperatives and condominium associations where short-term rental is allowed, there is a risk of being expelled from the association, potentially leading to being compelled to sell the property, in cases where there are severe or repeated issues with Airbnb guests," Hansen added.
Are you taxed for subletting on Airbnb?
In 2018, Denmark became the first country to get Airbnb to report short term rental income directly to the national tax authority. The agreement came into effect on July 1st 2019 and from 2021, Airbnb automatically reports landlord earnings to the tax authority, similar to reporting income from holiday home agencies.
People renting their homes out on Airbnb are therefore taxed. The first 31,200 kroner (2023) is tax free. 60 percent of the income that exceeds 31,200 kroner, is taxed as capital income with a tax rate of 33.6 percent.
The organisation Videncentret Bolius has calculated an example where someone rents out their apartment for 700 kroner a day kroner for a maximum of 70 days a year. After a rental commission of 3.1 percent for Airbnb and tax payment, this gives an income of 44,237 kroner.
If you rent out your holiday home privately (without a letting agency or Airbnb), only the first 12,200 kroner (2023) is tax-free.
If you are a student receiving SU, you have to be aware that your Airbnb income also counts towards your personal income limit.
Comments
See Also
Subletting or renting out your home on Airbnb is a popular way to earn some extra money, especially during holiday seasons. More than 70,000 people rented out their homes in Denmark through the service in 2019, according to Airbnb. But if you want to join the trend, the type of accommodation you're living in can be a deciding factor on whether it is legal.
Owned home (Ejerbolig)
If you want to rent out your owner-occupied apartment on Airbnb, you are generally free to do so but it is worth first checking with your owner's association (ejerforening).
If a property is used exclusively for short-term rentals, similar to hotel operations, special permits are required including relation building permits, fire safety measures, and other relevant requirements, Søren Saaby Hansen, a lawyer from the firm Øens, told The Local.
Cooperative home (Andelsboligforening)
This is property owned by a cooperative association and its members. Individual residents do not own their apartments but have exclusive rights to it after buying, so it is considered a combination of a condominium and a rental property.
In housing cooperatives, the association itself establishes the rules for rental. So if the cooperative's bylaws state that the apartments can only be used by members, then it is not legal for members of the housing cooperative to rent out their apartments, whether on regular long-term leases or through platforms like Airbnb, Hansen said.
If the association's bylaws do not contain a specific rule against renting out the apartments via Airbnb or similar platforms, members can generally rent out their apartments. It's worth noting that the association can limit the number of days members can rent out their home.
"As a general rule, owner-occupied properties, including houses, townhouses, and condominiums, can be freely rented out for private residence purposes. While there may be specific restrictions on residential rentals in the bylaws of condominium associations, such cases are relatively rare," Hansen added.
Rented home (Lejebolig)
If you live in a rental apartment or house, it is unlikely you will be allowed to sublet it on Airbnb.
According to the Tenancy Act, only those who signed the lease can live in the property and you cannot entrust the lease to anyone other than household members without the landlord's permission.
A violation of these rules can be considered a breach of the contract and may lead to termination of the tenancy agreement, Hansen explained.
In a judgment from the Housing Court in Frederiksberg, it was ruled that private landlords can cancel a lease if the tenant sublets their apartment on Airbnb repeatedly for short periods.
The rules for subletting longer-term are different and can be found in Sections 157 and 158 of the Danish Tenancy Act (Lejeloven).
Section 157 applies to situations where a tenant sublets a portion of their home. Here, the tenant has the right to sublet up to half of the apartment's living space, as long as the number of people living in the tenancy is not more than the number of rooms (which means living rooms and bedrooms) and the tenant is still living there. In order to do this, you need to have a written sublease agreement drawn up and present it to the landlord before the sublease begins. This does not fall under Airbnb sublets, which are more short-term.
The subletting of the entire property is regulated by Section 158 of the Danish Tenancy Act which allows you to sublet your tenancy for up to two years if there is a good reason, based on the fact you temporarily do not need the accommodation, such as studying abroad, illness, or business travel.
In smaller properties consisting of 12 or fewer residential apartments, the landlord may oppose the subleasing arrangement if the total number of occupants would exceed the number of rooms, or if the landlord has other reasonable grounds to object to the subletting.
How much can I charge on Airbnb?
Due to a change to the rules in the Tenancy Act in 2016, landlords renting out properties for short-term holiday and leisure purposes can now decide the amount they want to charge. The tenant cannot later complain to the local rent board about the amount of the rent or other financial matters surrounding the letting.
How long can I rent out my home on Airbnb?
In 2018, parliament set a cap for people renting out their home on Airbnb to a maximum of 70 days. Individual municipalities may decide to allow short-term rentals for up to 100 days per year.
READ ALSO: In world first, AirBnB to report income directly to Danish authorities
However both the housing owners' associations and housing cooperatives can overrule this and set the cap to lower.
Am I covered by insurance if I rent out my home?
As a landlord through Airbnb, you are covered by their host guarantee which covers up to 5,000,000 kroner for damage to the home that a tenant may cause. But it is not an insurance policy and does not cover stolen items, for example, or wear and tear, which is why it is a good idea to get your own deposit from your guests.
"Regardless of whether you are a tenant, homeowner, or shareholder in a housing cooperative, you are generally responsible for the individuals you grant access to your home, including during subletting. It is therefore crucial to conduct proper screening of prospective subtenants," Hansen warned.
"In extreme cases where the behaviour of guests is severe enough, the landlord may be entitled to terminate the tenancy, even if the tenant had obtained permission to sublet from the landlord.
"In housing cooperatives and condominium associations where short-term rental is allowed, there is a risk of being expelled from the association, potentially leading to being compelled to sell the property, in cases where there are severe or repeated issues with Airbnb guests," Hansen added.
Are you taxed for subletting on Airbnb?
In 2018, Denmark became the first country to get Airbnb to report short term rental income directly to the national tax authority. The agreement came into effect on July 1st 2019 and from 2021, Airbnb automatically reports landlord earnings to the tax authority, similar to reporting income from holiday home agencies.
People renting their homes out on Airbnb are therefore taxed. The first 31,200 kroner (2023) is tax free. 60 percent of the income that exceeds 31,200 kroner, is taxed as capital income with a tax rate of 33.6 percent.
The organisation Videncentret Bolius has calculated an example where someone rents out their apartment for 700 kroner a day kroner for a maximum of 70 days a year. After a rental commission of 3.1 percent for Airbnb and tax payment, this gives an income of 44,237 kroner.
If you rent out your holiday home privately (without a letting agency or Airbnb), only the first 12,200 kroner (2023) is tax-free.
If you are a student receiving SU, you have to be aware that your Airbnb income also counts towards your personal income limit.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.