Apartment prices up in Danish cities with new property tax imminent
The sales price of apartments in cities rose for the fifth consecutive month in July, out of keeping with price trends in the rest of the housing market.
New figures from real estate media Boligsiden, released Thursday, show that there was no fall in prices for apartments in July, the fifth month in a row that prices have failed to drop.
A likely reason for this is a change to property tax rules which takes effect next year. The new rules mean that more property tax is likely to be due from 2024 onwards for owners of apartments located in cities. The effect will be less pronounced for owners of houses or properties in smaller cities.
This means there is more likely to be interest in city apartments among buyers this year, while the old rules still apply.
“Price increases in the expensive areas have been stronger in recent months. I think that is because some buyers are moving their purchases forward because of the new property taxes that take effect at the turn of the year,” economist Mathias Dollerup Sproegel of Sydbank told news wire Ritzau.
While apartment prices were unchanged on average nationally last month, they were up 0.7 percent in Copenhagen.
The upcoming changes to property taxes will mean less tax for most homeowners, Sproegel noted.
READ ALSO:
- What do homeowners need to know about new Danish property tax rules?
- EXPLAINED: Denmark’s new property tax rules from 2024
Only owners of homes in expensive areas, who purchase them from 2024 onwards, will find themselves paying significantly more according to the economist.
This is because outgoing property tax rates are based on valuations from as far back as 2001 or 2002. The new rules will use newer property valuations, which will account for higher valuations of the land on which apartments in sought-after areas are built.
“If you have a timescale of many years, a lot of money could be saved in the budget by buying now – so perhaps there’s some panic buying in both the rapidly increasing number of sales and the increasing prices of apartments,” housing economist with Nykredit, Mira Lie Nielsen, said in a written comment to news wire Ritzau.
The price of apartments has increased by 5 percent nationally in the last 5 months, following a drop in prices in the second half of 2022. In Copenhagen, this figure is as much as 7 percent.
Sproegel predicted these increases will flatten by the end of the year.
“We could then see that prices in the expensive areas will not go up in the same way as the rest of the country. We could even see them begin to fall,” he said.
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New figures from real estate media Boligsiden, released Thursday, show that there was no fall in prices for apartments in July, the fifth month in a row that prices have failed to drop.
A likely reason for this is a change to property tax rules which takes effect next year. The new rules mean that more property tax is likely to be due from 2024 onwards for owners of apartments located in cities. The effect will be less pronounced for owners of houses or properties in smaller cities.
This means there is more likely to be interest in city apartments among buyers this year, while the old rules still apply.
“Price increases in the expensive areas have been stronger in recent months. I think that is because some buyers are moving their purchases forward because of the new property taxes that take effect at the turn of the year,” economist Mathias Dollerup Sproegel of Sydbank told news wire Ritzau.
While apartment prices were unchanged on average nationally last month, they were up 0.7 percent in Copenhagen.
The upcoming changes to property taxes will mean less tax for most homeowners, Sproegel noted.
READ ALSO:
- What do homeowners need to know about new Danish property tax rules?
- EXPLAINED: Denmark’s new property tax rules from 2024
Only owners of homes in expensive areas, who purchase them from 2024 onwards, will find themselves paying significantly more according to the economist.
This is because outgoing property tax rates are based on valuations from as far back as 2001 or 2002. The new rules will use newer property valuations, which will account for higher valuations of the land on which apartments in sought-after areas are built.
“If you have a timescale of many years, a lot of money could be saved in the budget by buying now – so perhaps there’s some panic buying in both the rapidly increasing number of sales and the increasing prices of apartments,” housing economist with Nykredit, Mira Lie Nielsen, said in a written comment to news wire Ritzau.
The price of apartments has increased by 5 percent nationally in the last 5 months, following a drop in prices in the second half of 2022. In Copenhagen, this figure is as much as 7 percent.
Sproegel predicted these increases will flatten by the end of the year.
“We could then see that prices in the expensive areas will not go up in the same way as the rest of the country. We could even see them begin to fall,” he said.
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