Routes to investment are:
Non-Danish companies and individuals, who have not been residents of Denmark for a period of at least five years need permission from the Ministry of Justice to buy real estate in Denmark. Special rules apply for nationals of EU or EEA Member States.
Last modified 13 Mar 2025
There are no taxes on the purchase of real estate in Denmark (please see below on registration fees).
Last modified 13 Mar 2025
The sale and purchase of real estate is — as a general rule — not subject to VAT.
However, VAT at the rate of 25% will apply to the sale of land plots and new buildings, provided the sale is carried out as part of a business activity. The rules apply to individuals as well as companies carrying on a business activity.
A building is considered new if it is sold prior to its first occupation, or if the first sale occurs less than five years after the date of completion. A building that has been rebuilt substantially within five years of the sale for an amount exceeding 25% of the official property value plus the value of the rebuilding or the purchase price, whichever is higher, is considered a new building. The sale of development properties with existing old buildings ripe for demolition may in some circumstances be regarded as the sale of a land plot.
Certain exceptions to a sale of land plots and new buildings being subject to VAT exist, including with respect to properties constructed and used solely for VAT-free rental purposes, land plots previously used for VAT-free purposes, and sales constituting a VAT-exempt transfer of business (eg if the seller is voluntarily registered for VAT on rental of the property and the buyer is to continue the VAT-liable rental activities). The buyer generally has the right to recover VAT charged by the seller if the buyer is a VAT taxpayer carrying out transactions subject to VAT provided the acquired real estate forms part of these activities.
The owner of a property used for VAT-liable purposes (eg a new building for resale or a rental building voluntarily registered for VAT) is entitled to deduct VAT on the acquisition price and construction costs in full in the year of acquisition or investment, including VAT on improvement works and maintenance works.
If VAT on the acquisition price or construction costs for the property has been deducted, a VAT adjustment liability will apply to the property, meaning that the deducted VAT must be repaid if the use of the property is changed from a VAT-liable purpose to a partial VAT-exempt purpose. The VAT adjustment liability applies for a period of five or ten years, over which the liability is depreciated proportionately by 1/10 or 1/5.
In the case of a VAT-exempt sale of the property after five years from the completion but during the VAT adjustment liability period, the remaining VAT liability must be paid, unless the buyer takes over the adjustment liability, and provided the buyer is registered for VAT and has at least the same right to deduct as the seller. It is common for the buyer to assume the VAT adjustment liability if the buyer intends to continue the operation of the property. The assumption of the VAT adjustment liability must be regulated in the purchase agreement.
The above stated VAT adjustment rules are not applicable in case that the use of the property is changed from VAT-liable use to 100% VAT-exempt use. This could be the case where an intent of sale is changed to an intent to lease out the property.
In this case the owner must calculate a ‘fictitious’ self-supply VAT amount. The VAT amount is based on the market value of the property at the time of the change of use. Hence, the owner must include an upfront VAT cost in their financing requirements and that amount may be higher than the initially recovered VAT amount.
Last modified 13 Mar 2025
The fee for the registration of a title document is DKK 1,850 plus 0.6% (in Danish: Tinglysningsafgift). In a sale between independent parties the registration fee will be calculated based on the purchase price. Unless agreed otherwise between the parties, the registration fee is paid by the buyer.
Last modified 13 Mar 2025
Property taxes are payable. Income on real estate, eg rental income is taxable on a net income basis.
Properties are subject to an annual land taxation levied by the municipality at a rate of up to between 3% of 80% of the land value (in Danish: Grundskyld), depending on their location. The land value is assessed every two years.
From 2024 the annual property tax of up to 3% will be applied on 80% of the land value assessment.
Land tax is deductible against taxable income from properties used for commercial activities.
Properties used for commercial activities (offices, shops, hotels, factories, workshops or any similar purpose) may be subject to an additional tax – municipal charge (Dækningsafgift) – levied by the municipal. The charge will be calculated based on 80% of the land value. It is for each municipal authority to determine whether to levy the municipal charge on properties used for commercial activities. The municipal charge may as a general rule be levied at a rate of up to 1% of 80% of the land value. In the period until 2028 the rate may be higher than 1% depending on the municipality. The additional municipal charge is levied primarily by municipalities near the major Danish cities. The object of the additional municipal charge is to contribute to the expenditure for roads, streets, parking spaces, fire service etc, inflicted by commercial properties on the municipality.
Income from the ownership of real estate in Denmark is taxable income. For corporate owners such income is taxed at the corporate tax rate of 22%. For individuals the income is taxable as ordinary income, however, special rules apply to individuals carrying on business activities, who may select a preliminary taxation similar corporation tax, until the income is made available for private spending.
Last modified 13 Mar 2025
Owners of real estate may be obliged to pay refuse collection charge and/or rat control charge.
Last modified 13 Mar 2025
Income is generated by rent or from concession fees depending on which type of contract applies.
Last modified 13 Mar 2025
Taxable income from of real estate in Denmark is calculated on a net income basis. For corporate owners such income is taxed at the corporate tax rate of 22%.
For individuals the income is taxable as ordinary income, however, special rules apply to individuals carrying on business activities, who may select a preliminary taxation similar corporation tax, until the income is made available for private spending.
Last modified 13 Mar 2025
In general, partnerships and limited partnerships are transparent for Danish tax purposes, and the partners are taxed directly in accordance with their pro-rata ownership in the partnership. Shareholders may be subject to withholding tax on dividends distributed by a corporate vehicle, which is a taxable entity in Denmark. As a starting point, the Danish withholding tax is 27%. However, corporate owners may be tax exempt under if resident in an EU member state or a jurisdiction with whom Denmark have a double tax treaty.
For individual Danish shareholders the rate of taxation on dividends is progressive.
Dividends are currently taxed at a rate of 27% for income up to DKK 67,500 (2025). Income exceeding DKK 67,500 is taxed at a rate of 42%. The threshold is adjusted annually.
For corporate shareholders who receive dividends received from unlisted Danish shares may be tax exempt from 1 January 2025, if the shareholder is resident in an EU member state or a jurisdiction with whom Denmark have a double tax treaty.
Generally, a company resident in Denmark must as a starting point withhold tax at a rate of 27% when it declares dividends to non-resident shareholders. The withholding obligation applies to the declaration of dividends to all types of shareholders, whether individuals or companies, resident in Denmark or abroad. In certain cases, the recipient may qualify for an exemption at source of the Danish withholding tax. If the withholding tax rate exceeds the final tax rate applicable to the foreign company shareholder, the shareholder is entitled to claim a refund of the tax withheld in excess of the final rate. The statute of limitations on such claims for refund of dividend withholding tax is three years.
Dividends paid to a corporate shareholder abroad from unlisted Danish shares are exempt from withholding tax if the following conditions are met:
Last modified 13 Mar 2025
No.
Last modified 13 Mar 2025
No.
Last modified 13 Mar 2025
Profits from the sale of investment property are taxed as capital gains in Denmark. For corporate owners (resident or non-resident) the applicable rate is 22%. Losses may be offset against taxable gains on real property, Losses may be carried forward indefinitely.
Corporate bodies which own real estate may both reduce and offset their tax liability but this depends on their specific circumstances.
In general, individuals holding real estate in Denmark are liable to taxation on capital gains from the sale of real property. Losses may be offset only against taxable gains on real property. Losses may be carried forward indefinitely. For individuals the rate is up to 42%, depending on the individual's total income.
Capital gains on real property that has served as the personal residence of the individual owner are in general tax-exempt. Similarly, losses on such property are not deductible.
Last modified 13 Mar 2025
There are none.
Last modified 13 Mar 2025
How can investment in real estate by an individual/organization/company be set up?
Routes to investment are:
Non-Danish companies and individuals, who have not been residents of Denmark for a period of at least five years need permission from the Ministry of Justice to buy real estate in Denmark. Special rules apply for nationals of EU or EEA Member States.
Last modified 13 Mar 2025