What do homeowners need to know about new Danish property tax rules?
Denmark is set to implement new laws from January 1st 2024 that will impact the way property tax is calculated. Here’s what homeowners should know.
New property tax rules adopted by parliament back in 2017 will mean 4 in 5 homeowners will pay a lower rate of property tax, according to an outline of the changes issued by bank Nykredit.
But the remaining homeowners need not be concerned about the impact on their private finances, because they will be given subsidies intended to insure their property tax burden does not go up as a result of the new rules.
On the other hand, as The Local reported in an earlier article, future homeowners could face a different property tax bill once the new rules have taken effect, compared to if they had purchased their home before 2024.
READ ALSO: EXPLAINED: Denmark’s new property tax rules from 2024
The new property tax rules are designed to keep property tax stable as new property valuations, on which taxes are calculated, come into effect.
In short, homeowners will from 2024 onwards pay property tax based on valuations of their property made in 2022, an update from older data.
For most people, the new valuations will be higher than the older ones, because house prices have generally risen in the intervening years. Houses and apartments in and around major cities have seen their values increase the most.
In response to the rising valuations, parliament adopted a new property tax law (ejendomsskattelov). The new law means that property value tax rates (ejendomsværdiskattesatser) and land value tax (grundskyld) will both be reduced from next year.
In other words, the higher valuation of your home will push your property tax up, but a lower rate will make sure you pay around the same amount.
Several other aspects of the law have also been introduced to protect homeowners from a sharp tax rise.
Existing homeowners will be given a tax deduction if the valuation of their property has increased so much that they owe more than before the reform, even after the lower rate is applied. The purpose of the subsidy is to ensure homeowners don’t pay more in property tax in 2024 than they did on the same home under the old rules. The deduction is applied to their property tax annually for as long as they own the home.
If the property valuation – and therefore tax – goes up again at a later date, the homeowner will be able to freeze their tax payment through a special loan.
Collection of the land value tax (grundskyld) has meanwhile been moved from municipalities to the state under the new rules, in a change designed to simplify the system. This means that land value tax will be collected in the annual tax return (årsopgørelsen) instead of through a bill issued by the local municipality.
Individual amounts that will be due in property tax in 2024 will be displayed in the preliminary tax return or forskudspgørelse for the year. These preliminary returns are issued in the preceding November – so November 2023 for the 2024 taxes.
More information in the new rules can be found (in Danish) here.
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New property tax rules adopted by parliament back in 2017 will mean 4 in 5 homeowners will pay a lower rate of property tax, according to an outline of the changes issued by bank Nykredit.
But the remaining homeowners need not be concerned about the impact on their private finances, because they will be given subsidies intended to insure their property tax burden does not go up as a result of the new rules.
On the other hand, as The Local reported in an earlier article, future homeowners could face a different property tax bill once the new rules have taken effect, compared to if they had purchased their home before 2024.
READ ALSO: EXPLAINED: Denmark’s new property tax rules from 2024
The new property tax rules are designed to keep property tax stable as new property valuations, on which taxes are calculated, come into effect.
In short, homeowners will from 2024 onwards pay property tax based on valuations of their property made in 2022, an update from older data.
For most people, the new valuations will be higher than the older ones, because house prices have generally risen in the intervening years. Houses and apartments in and around major cities have seen their values increase the most.
In response to the rising valuations, parliament adopted a new property tax law (ejendomsskattelov). The new law means that property value tax rates (ejendomsværdiskattesatser) and land value tax (grundskyld) will both be reduced from next year.
In other words, the higher valuation of your home will push your property tax up, but a lower rate will make sure you pay around the same amount.
Several other aspects of the law have also been introduced to protect homeowners from a sharp tax rise.
Existing homeowners will be given a tax deduction if the valuation of their property has increased so much that they owe more than before the reform, even after the lower rate is applied. The purpose of the subsidy is to ensure homeowners don’t pay more in property tax in 2024 than they did on the same home under the old rules. The deduction is applied to their property tax annually for as long as they own the home.
If the property valuation – and therefore tax – goes up again at a later date, the homeowner will be able to freeze their tax payment through a special loan.
Collection of the land value tax (grundskyld) has meanwhile been moved from municipalities to the state under the new rules, in a change designed to simplify the system. This means that land value tax will be collected in the annual tax return (årsopgørelsen) instead of through a bill issued by the local municipality.
Individual amounts that will be due in property tax in 2024 will be displayed in the preliminary tax return or forskudspgørelse for the year. These preliminary returns are issued in the preceding November – so November 2023 for the 2024 taxes.
More information in the new rules can be found (in Danish) here.
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