Property tax in Denmark is called “ejendomsværdiskat” and is based on the value of the property. The tax rate varies depending on the municipality, but the average rate is around 1.6%. Property tax is paid annually, and the property owner is responsible for paying the tax.
Capital Gains Tax
- Capital gains tax (CGT) in Denmark is called “aktieavancebeskatning” and is levied on the sale of real estate. The tax rate is 22% for individuals and 27% for companies.
- CGT is calculated on the difference between the purchase price and the sale price of the property.
- There is a tax-free allowance of DKK 40,000 (about €5,300) for individuals and DKK 80,000 (about €10,600) for couples who file taxes jointly.
Inheritance Tax
- Inheritance tax in Denmark is called “arveafgift” and is levied on the transfer of property from one person to another upon death.
- The tax rate varies depending on the relationship between the deceased and the inheritor, but ranges from 15% to 33%.
- Spouses and children are generally taxed at a lower rate, while more distant relatives and non-relatives are taxed at a higher rate.
Gift Tax
- Gift tax in Denmark is called “gaveafgift” and is levied on the transfer of property from one person to another while the giver is still alive.
- The tax rate is 15%, and there is an annual tax-free allowance of DKK 15,000 (about €2,000) per person.
Tax on Property Income
- Income from renting out a property in Denmark is subject to income tax, which ranges from 0% to 55% depending on the amount earned.
- Landlords are also responsible for paying a “skattefritagelse for ejendomshandel” which is a tax-free allowance for property income.
Tax Advantages
- There are no specific tax advantages for buying a house in Denmark. However, the tax-free allowance for CGT and the tax-free allowance for property income may reduce the overall tax burden for some individuals.
- It is advisable to check with a tax advisor to ensure that you are aware of all the tax implications of buying or selling a property in Denmark.