Copenhagen house prices propped up by new tax rules
The prospect of a tax discount from the beginning of next year is driving prices on Copenhagen’s housing market.
New property tax rules that come into effect on January 1st, 2024 are likely to result in higher property tax for people who purchase their homes after that date.
This is because property tax will from next year be based on updated property valuations, but people who already owned their homes before the change took effect will see lower rates applied to protect them from higher tax bills.
Because apartments and houses in and near Copenhagen have seen their values rise the most on recent years, these properties are likely to see the biggest difference in tax calculations under the new rules.
READ ALSO:
- How to look up estimated Danish property tax for 2024
- What do homeowners need to know about new Danish property tax rules?
- EXPLAINED: Denmark’s new property tax rules from 2024
The incoming tax changes are having the effect of keeping property prices up in the Copenhagen area, Mira Lie Nielsen, housing economist at Nykredit, said based on new house price data released by real estate media Boligsiden.
“When we switch to a new housing tax system on January 1st, the tax on owner-occupied apartments in particular is expected to rise very significantly for new home buyers,” Nielsen told news wire Ritzau.
“But if you buy before the turn of the year, you are guaranteed a tax discount,” she said.
“And it seems that many people are buying an apartment in Copenhagen now to make sure they keep the lower property tax for many years to come,” she said.
Last month saw prices for houses and apartments in the Greater Copenhagen region rise by 0.6 per cent and 1.1 per cent respectively.
Nielsen said that prices for apartments are likely to fall again in 2024.
“We expect that the prices of apartments will fall in 2024 as a result of the new property tax rules because higher property tax means higher fixed costs for the property in question,” she said.
The increase in prices for apartments and houses in Copenhagen is distinct from the general trend elsewhere on the housing market.
Prices for both apartments and houses have fallen in the Central Jutland region, while North Jutland has also seen house prices decrease.
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New property tax rules that come into effect on January 1st, 2024 are likely to result in higher property tax for people who purchase their homes after that date.
This is because property tax will from next year be based on updated property valuations, but people who already owned their homes before the change took effect will see lower rates applied to protect them from higher tax bills.
Because apartments and houses in and near Copenhagen have seen their values rise the most on recent years, these properties are likely to see the biggest difference in tax calculations under the new rules.
READ ALSO:
- How to look up estimated Danish property tax for 2024
- What do homeowners need to know about new Danish property tax rules?
- EXPLAINED: Denmark’s new property tax rules from 2024
The incoming tax changes are having the effect of keeping property prices up in the Copenhagen area, Mira Lie Nielsen, housing economist at Nykredit, said based on new house price data released by real estate media Boligsiden.
“When we switch to a new housing tax system on January 1st, the tax on owner-occupied apartments in particular is expected to rise very significantly for new home buyers,” Nielsen told news wire Ritzau.
“But if you buy before the turn of the year, you are guaranteed a tax discount,” she said.
“And it seems that many people are buying an apartment in Copenhagen now to make sure they keep the lower property tax for many years to come,” she said.
Last month saw prices for houses and apartments in the Greater Copenhagen region rise by 0.6 per cent and 1.1 per cent respectively.
Nielsen said that prices for apartments are likely to fall again in 2024.
“We expect that the prices of apartments will fall in 2024 as a result of the new property tax rules because higher property tax means higher fixed costs for the property in question,” she said.
The increase in prices for apartments and houses in Copenhagen is distinct from the general trend elsewhere on the housing market.
Prices for both apartments and houses have fallen in the Central Jutland region, while North Jutland has also seen house prices decrease.
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