As a homeowner in Denmark, it's essential to understand your housing tax. It primarily concerns two types of tax: ejendomsskat (also called grundskyld, or land tax), which is paid to the municipality, and ejendomsværdiskat (property value tax), which is paid to the state.
With the housing tax reform, which took effect on 1 January 2024, new rules, rates, and valuations have been introduced that have a major impact on your finances. At Bomae, we are your trusted partner in the property market, and we guide you through the current rules — explained in plain language and with examples, so you can easily understand your tax and make informed decisions.
What is property tax and property value tax? Housing tax is an umbrella term for the charges you pay as the owner of a property in Denmark. It covers two main types: ejendomsskat (grundskyld, land tax) and ejendomsværdiskat (property value tax).
Ejendomsskat (Grundskyld): Tax to your municipality
Ejendomsskat, commonly known as grundskyld (land tax), is a tax levied by your municipality. This tax is calculated solely on the value of your land — that is, the plot the property sits on — and not on the buildings. Municipalities use the land tax as an important source of revenue to fund local public services and infrastructure, such as schools, roads, and elderly care.
Ejendomsværdiskat: Tax to the state
The ejendomsværdiskat (property value tax) is a tax homeowners pay on the total value of their property — that is, both land and buildings. This tax is levied by the state and funds national expenditure. The property value tax rate is the same across the whole country, unlike the land tax, where the rate varies from municipality to municipality.
Who pays what, and to whom?
As a homeowner, you pay both land tax and property value tax. The land tax goes to your municipality, while the property value tax goes to the state. Following the 2024 housing tax reform, both taxes are now collected together via the Danish Tax Agency (Skattestyrelsen) and appear on your preliminary tax assessment (forskudsopgørelse) and annual tax statement (årsopgørelse). You therefore no longer receive a separate property tax bill from the municipality.
Ejendomsskat (Grundskyld): Calculation and municipal differences The land tax (grundskyld) is calculated based on the land value and a municipal land tax rate (grundskyldspromille). This rate varies from municipality to municipality.
How your land tax is calculated in practice
Your land tax is calculated based on your land value, which is the public valuation of your land's worth. From 2024, you receive a general deduction of 20% of the land value before the tax is calculated. The remaining value (80% of the land value) is your tax base. The municipality then sets a land tax rate within the limits set by law, which is multiplied by the tax base to determine the annual land tax.
Example calculation: Assume your land is assessed at 1,000,000 kr. in 2025.
- Deduction: You receive a general deduction of 20%, equivalent to 200,000 kr. (20% of 1,000,000 kr.).
- Tax base: Your tax base becomes 800,000 kr. (1,000,000 kr. – 200,000 kr.).
- Land tax: If your municipality has a land tax rate of, for example, 5‰, your annual property tax will be 4,000 kr. (5‰ of 800,000 kr.).
In a municipality with a higher rate, for example 16‰, the tax on the same tax base would be 12,800 kr. per year (16‰ of 800,000 kr.).
Municipal differences in the land tax rate
Municipalities set their own land tax rate, but must stay within the limits set by law. Following the new property valuations from 2024, many municipalities have significantly lowered their rate to adjust the tax in line with the generally higher valuations. Current rates typically range from around 3‰ to 18‰.
Examples of rates (2025):
- Frederiksberg Municipality: Among the lowest, at approximately 3.10‰.
- Copenhagen Municipality: Approximately 5.10‰, also at the low end.
- Varde Municipality: Among the highest, at approximately 17.70‰.
This variation ensures that municipalities continue to receive the revenue they need, even though individual land values have risen. It's important to note that the rates can be adjusted by individual municipalities each year.
Ejendomsværdiskat: rates, deductions, and special circumstances The property value tax is a nationwide tax paid to the state, calculated on the total property value (land + building).
Current rates for property value tax
From 2024, the rates for property value tax have been reduced as part of the housing tax reform. The primary rate is approximately 0.55% of the property value up to a certain threshold (the progression limit), and approximately 1.4% of the value exceeding this threshold. The progression limit has been significantly raised under the new system and now stands at around 9.2 million kr. for a home's total value. This means that only very high-value properties will pay the higher rate.
20% valuation deduction: A relief for all homeowners
Just as with the land tax, you also receive a general deduction of 20% of the public property valuation before the property value tax is calculated. This deduction was introduced to ensure tax relief for homeowners under the new system. So if your home is assessed at, say, 5 million kr., the tax is calculated on 4 million kr. (80% of the value).
Example calculation: Your property value (land + house) is assessed at 5,000,000 kr.
- Deduction: The tax base is 80% of this, i.e. 4,000,000 kr.
- Property value tax: Since 5 million kr. is below the progression limit, the tax is calculated as 0.55% of 4,000,000 kr. = 22,000 kr. per year.
If your home had a value of, say, 12,000,000 kr., you would pay 0.55% of the first approximately 9,200,000 kr. (with the 20% deduction applied) and 1.4% of the remaining approximately 2,800,000 kr. (with the 20% deduction applied), which combined would total around 51,000 kr. annually.
Special reduction for properties bought before 1998
If you owned your home before 1 July 1998, you can still benefit from a special reduction in your property value tax. This tax relief reduces your property value tax by 2 per mille (0.2%) of the property value. This reduction is a "personal" arrangement that lapses upon change of ownership. This means that if you buy a home today, the old reduction does not carry over, but the new owner benefits from the generally lower rates introduced by the reform instead.
The 2024 housing tax reform: understanding the new rules The housing tax reform, which took effect on 1 January 2024, has transformed the way housing taxes are calculated and collected in Denmark. The goal was to create a fairer and more transparent system.
What do the new property valuations involve?
After more than a decade without updated public property valuations, the Danish Property Assessment Agency (Vurderingsstyrelsen) has now issued new valuations to nearly all homeowners. These valuations form the basis for housing tax from 2024 onward. For owner-occupied homes, it is typically the valuations as of 1 January 2020 or 1 January 2021 that form the starting point for tax calculations from 2024, followed by ongoing valuations for 2022, 2024, and so on. You can view your valuation and appeal it via the Valuation Portal (Vurderingsportalen).
Lower tax rates and the general 20% deduction
A central part of the reform is that the rates for both land tax and property value tax have been significantly reduced. At the same time, a general 20% deduction has been introduced for both land value and property value before the tax is calculated. These measures are designed to ensure that most homeowners pay either the same or less in housing tax, even with higher property valuations.
Tax discount: Protection against tax increases
To protect existing homeowners from tax increases resulting from the reform, an automatic tax discount (skatterabat) has been introduced. This discount takes effect if your housing tax under the new 2024 rules would have been higher than what you would have paid under the old rules. The discount matches the difference and ensures that your total housing tax does not increase in kroner and øre.
- Personal and temporary: The discount is personal and stays with you as the owner. It appears on your annual tax statement under "Discount because you owned the property before 1/1 2024".
- Lapses upon sale: When the home is sold, the discount lapses for the new owner. In return, the new owner has bought the home at a price that already reflects the new, market-based tax.
Payment via the preliminary tax assessment — a new, unified approach
One of the biggest changes is that the collection of housing taxes is now fully integrated into the Danish Tax Agency's system. This means:
- Combined payment: Your expected housing tax (both land tax and property value tax) for the whole year appears on your preliminary tax assessment (forskudsopgørelse).
- Ongoing deductions: The amount is spread across the months of the year and is typically deducted automatically via your tax withholding rate (trækprocent) from your salary, just like other taxes.
- Check your preliminary tax assessment: It's essential to check your preliminary tax assessment, especially if you have bought or sold a home, or if there have been other changes to your housing situation, to make sure you're paying the correct amount.
- The annual tax statement: On your annual tax statement (årsopgørelse), you can for the first time see a combined overview of what you have paid in property value tax and land tax over the course of the year.
This centralised collection makes the process more streamlined and transparent for most homeowners.
Deferral loans for pensioners: getting help with your housing tax As a pensioner, you have the option of applying for a deferral loan (indefrysningslån), known as a pensionistlån, for your land tax. This is an important scheme for many seniors, who may find it difficult to cope with an increase in land tax.
What is a pensioner loan?
A pensioner loan is a scheme in which the state offers to lend you money to pay your land tax, or any increase in the land tax. The loan is interest-free (though with a minimum interest rate that tracks the market rate, subsidised by the state), and is only repaid when the property is sold, or if you opt out of the scheme.
Who can get a pensioner loan?
You can apply for a pensioner loan if you:
- Have reached the state pension age.
- Receive disability pension (førtidspension).
- Receive senior pension (seniorpension) or early retirement benefit (efterløn).
The loan typically requires security in your property and can cover both increases in the land tax and the full land tax amount.
How to apply for a pensioner loan
Applications are submitted digitally via the Danish Tax Agency (Skattestyrelsen). You need your MitID to log in and complete the application form. It's important to have your property valuation and preliminary tax assessment on hand. Once the loan is approved, the Danish Tax Agency automatically arranges for the deferred amounts to be covered by the loan.
Appealing a property valuation: When you disagree with your assessment The new property valuations form the basis for your housing tax, so it's essential that they are correct. If you believe your property valuation is wrong, you have the option to appeal.
How do you appeal a property valuation?
The appeal must be submitted via Vurderingsportalen.dk, which is run by the Danish Property Assessment Agency (Vurderingsstyrelsen). You log in with MitID and can then view your valuation and the deadline you have for appealing. The appeal deadline is typically 6 weeks after you received your valuation.
What should your appeal include?
For your appeal to be processed effectively, it should include:
- Concrete arguments: Why do you believe the valuation is incorrect? Point to factual errors in the data (for example, incorrect area, incorrect building materials).
- Documentation: Attach relevant documentation, such as photos, professional reports (for example, from a real estate agent or valuer), or comparable sale prices for similar properties in the area.
- Your contact details.
A thorough, well-reasoned appeal increases the chances of a reassessment.
Changes in property circumstances and their tax consequences Life with a home is rarely static. Buying, selling, renovating, or renting out can all affect your property tax and property value tax.
Buying and selling a home
When buying or selling a property, it's important to be aware of how the housing taxes are divided. The taxes are typically split proportionally between buyer and seller on the date of transfer (overtagelsesdagen). Remember that any personal tax discount lapses for the new owner, and any deferral loan on the land tax must be repaid. Bomae's advisers can help you understand the exact consequences of a change of ownership.
Renting out a home
If you choose to rent out your home — wholly or partly — this can have tax consequences. Rental income must generally be taxed, and the deduction rules may change. It's important to familiarise yourself thoroughly with the rules via the Danish Tax Agency or seek professional advice, especially if the letting takes on the character of a business.
New construction or major renovations
Major renovations, extensions, or new construction that significantly change your property's value or character will affect your property valuation and therefore your housing tax. It is your duty to inform the municipality and the Danish Property Assessment Agency of significant changes, so that your valuation can be updated correctly. Failure to report can lead to back payments being charged.
Paying housing taxes: deadlines and procedure Following the housing tax reform, the payment of property taxes has been centralised and streamlined.
General payment deadlines
Housing taxes (both land tax and property value tax) are now collected via your preliminary tax assessment. This means the amount is spread over the 12 months of the year and deducted automatically via your tax withholding rate from your salary, student grant (SU), pension, or other income. You therefore no longer need to keep track of separate payment deadlines for municipal property tax. However, it is essential to check your preliminary tax assessment to make sure the information the Danish Tax Agency is using is correct.
The Tax Account: Relevant for some homeowners
For most private homeowners, the Tax Account (Skattekontoen) is not directly relevant to the ongoing payment of housing tax, since this is handled via the preliminary tax assessment. However, the Tax Account may be relevant if, for example, you own commercial properties, or if you have properties with special tax circumstances, where payments in and out can be tracked here. A surplus or deficit on your Tax Account can affect your tax balance.
Consequences of failing to pay property tax It's important to pay your housing taxes on time. Failure to pay can lead to a number of unpleasant consequences.
Interest and reminders
If you don't pay your housing tax on time, the Danish Tax Agency will charge interest on the outstanding amount. You will also receive reminders informing you of the missed payment and the costs incurred. Interest rates are set on an ongoing basis and can add up significantly over time.
Debt collection
If payment continues to be missed, the Danish Tax Agency can initiate debt collection measures. This can include:
- Wage deduction: Part of your salary, pension, or other income can be withheld directly.
- Offsetting: Outstanding amounts can be offset against any refunds you are owed by the government (for example, an overpaid tax refund).
- Seizure of the property: As a last resort, the Danish Tax Agency can seize your property. This can potentially lead to a forced sale (tvangsauktion) if the debt is not paid.
It's always best to contact the Danish Tax Agency if you're having trouble paying your housing tax, to find a solution before the situation escalates.
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