Do you have a little dream of buying a house? Besides the down payment for the house itself, there are a number of monthly costs you need to factor in when working out what you can afford to live in long-term.
What can you afford to buy a house for?
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On average, it costs 11,240 kr. per month to live in a house in Denmark.
Prices depend heavily on location and municipality. Among other things, Frederiksberg is the most expensive place to live. Prices vary, however, due to many different factors, which we'll go through in this article.
Table of contents:
- Ownership costs and other expenses when living in a house
- Purchase price
- Financing
- Property value tax and land tax
- Waste collection costs
- Insurance
- Utility costs
- Maintenance and ongoing repairs
Ownership costs and other expenses when living in a house. To calculate your monthly housing costs, you need to account for a number of factors, such as loan repayments, interest, property tax, insurance, and costs for electricity, water and heating. We dive into the various costs of living in a house here.
You can also read much more about ownership costs here
Purchase price
One of the biggest costs of living in a house is the purchase price itself. Home prices in Denmark have risen in recent years. You need to be able to put down 5% as a down payment on the purchase yourself. For example, if you're buying a house for 2 million, you need to be able to put down 100,000 in cash as part of the purchase price.
In addition, there are other one-off costs when buying, such as lawyer's fees and the fee for tinglysning (land registration) of the deed.
Get an overview of the total costs of buying a house here
Financing
Buying a home will often involve financing through a home loan. Besides the down payment for the house itself, the payments on interest and the loan are the biggest expense of living in a house.
It's therefore important that you find the best home loan offer, so you get the lowest interest rates and fees to keep your monthly payments down. At Bomae, we're ready to help you finance your home purchase, so you find the home loan that suits you best. Read more here about financing a home — or get help from a financial advisor to find the best and cheapest loan for you.
Property value tax and land tax. When you buy a house, you also have to pay property taxes. Property value tax (ejendomsværdiskat) is a fixed annual expense that can vary depending on the municipality and the assessed value of the house.
There is a higher land tax and property value tax in Copenhagen. You can save up to 60% on monthly ownership costs by buying a home outside the big cities.
The property value tax consists of 9.2‰ of the house's value (based on the current year's assessment of the home) up to 3,040,000 kr. If the house is worth more than that, 20.8‰ is paid on the amount exceeding it. The property value tax is administered by the state, calculated by the Danish Tax Agency (Skattestyrelsen), and is therefore charged via the preliminary tax assessment (forskudsopgørelsen).
Read more about property value tax here
Grundskyld (land tax) — also called property tax — is a tax levied by the municipalities and calculated based on the property's land value. The tax is tied to the plot of land the home is on. Like property value tax, the land tax is based on a per-mille rate. The rate is at least 16‰ (1.6%) and at most 34‰ (3.4%).
Read more about buying a home and municipal tax
Waste collection costs. There are also other costs such as waste collection. Waste collection costs are charged together with the land tax, and consist of both a base fee and an administration fee. You can see the applicable waste collection rates for your municipality on the municipality's own website.
Insurance
Another cost to factor in is insurance, such as contents insurance or building insurance. It's important to have insurance that covers your home in case of damage, fire or theft. The insurance premium depends on factors such as the value and location of the house. You can compare prices for house insurance here
Utility costs
A large share of the ongoing costs of living in a house is payments for the household's energy consumption. This includes electricity, gas and water bills. These costs depend on the size of the house, the insulation, and whether you use energy-efficient appliances.
Read more about electricity, water and heating consumption at sparenergi.dk
Maintenance and ongoing repairs. Living in a house also involves costs for maintenance and ongoing repairs — especially if you want to keep your house in good condition. Whether it's minor repairs or larger renovation projects, it's important to have a budget for these costs.
A common rule of thumb is to budget around 1% of the house's sale value in maintenance costs per year. This is a very rough estimate, though, as it will also depend on the age and condition of the house.
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