Tax on property income in Denmark
Effective Tax Rate on Rental Income |
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| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 1.87% | 4.027% | 5.25% |
| Click here to see a worked example | |||
| Source: Global Property Guide research |
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INDIVIDUAL TAXATION
Nonresidents are taxed on their income from Danish sources. Married couples are taxed separately.
INCOME TAX
Nonresident individuals are taxed at the state and municipal levels. A health contribution tax is also being imposed on taxable income.
State Income Tax
The taxable income is generally computed as the sum of personal income and capital income, less general deductions.
STATE INCOME 2019 |
|
| TAXABLE INCOME, DKK (€) | TAX RATE |
| Up to 46,200 (€6,210) | 0% |
| 46,200 – 513,400 (€69,005) | 8% |
| Over 513,400 (€69,005) | 15% |
| Source: Global Property Guide | |
STATE INCOME 2018 |
|
| TAXABLE INCOME, DKK (€) | TAX RATE |
| Up to 43,800 (€5,887) | 0% |
| 43,800 – 498,900 (€67,056) | 8% |
| Over 498,900 (€67,056) | 15% |
| Source: Global Property Guide | |
STATE INCOME 2017 |
|
| TAXABLE INCOME, DKK (€) | TAX RATE |
| Up to 42,800 (€5,753) | 0% |
| 42,800 – 479,600 (€64,462) | 8.08% |
| Over 479,600 (€64,462) | 15% |
| Source: Global Property Guide | |
RENTAL INCOME
The taxable rental income can be computed in two ways:
- Income less related costs such as maintenance costs, depreciation and property taxes
- Income less an allowance of DKK7,000 (€941); 40% of the result is deducted in lieu of all deductions and costs
The resulting taxable income is then taxed at progressive rates.
CAPITAL GAINS
Taxable capital gains include gains on immovable property, debts and debt claims if they are attributable to immovable property.
The taxable capital gains are usually computed by deducting acquisition costs and transaction costs from the selling price. The capital gains are then included in the aggregate income and taxed at progressive rates.
According to the detached house rule, profits from selling residential properties measuring less than 1,400 sq m and which have served as the owner´s primary residence either fully or partially throughout the ownership period are exempt from taxation.
Municipal Income Tax
Nonresidents pay a municipal income tax at a flat rate of 24% on their taxable income.
Health Care Tax
The health care tax is charged at a flat rate of 4% of the taxable income.
PROPERTY TAX
National Property Tax
A national property tax is levied on the value of properties in Denmark. The taxable value is the lowest of:
- The assessed value as of 01 January of the current tax year;
- 105% of the assessed value as of 01 January 2001;
- The assessed value as of 01 January 2002.
The tax rate is 1% of the taxable value up to DKK3,040,000 (€408,602) and 3% on the value in excess of the limit.
NATIONAL PROPERTY TAX |
|
| PROPERTY VALUE, DKK (€) | TAX RATE |
| Up to 3,040,000 (€408,602) | 1% |
| Over 3,040,000 (€408,602) | 3% |
If the property was acquired before 01 July 1988, the applicable rates are generally reduced by 0.5% and 2.8% respectively.
Municipal Real Estate Tax
The municipal real estate tax rate is levied on the land value. The tax rate is between 1.6% and 3.4%, varying depending on the location
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