Buying a property in Denmark can be a natural step for those who have their domicile in the country, or foreign nationals who have been residing in Denmark for several years. In fact, a key consideration for foreigners willing to buy property is their tie to the country. Before starting the property purchase process foreign citizens or investors must know that there are a few requirements related to this procedure. Our specialists can offer the necessary support to comply with these requirements and more legal aspects.
| Quick Facts | |
|---|---|
| Overview on Danish real estate |
The Danish real estate market offers various property types and it is characterized by stability and a growing emphasis on sustainability. |
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Where to search for properties |
– real estate agencies, – online portals, – social media postings, – newspapers, – auctions, etc. |
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Requirements to buy a property |
Have domicile in Denmark or have had residence in Denmark for at least 5 years; Otherwise you need permission from the Department of Civil Affairs. |
| Permanent vs. non-permanent dwellings | Permanent dwellings are intended for year-round living, while non-permanent dwellings are often used seasonally or temporarily, such as holiday houses. |
| Permission to purchase a non-permanent dwelling |
– have family linguistic or cultural ties to Denmark, – be granted by the Department of Civil Affairs, – purchase the property within 3 years after permission. |
| Mortgages |
up to 80% of the property's total price (for residents) |
| Down payments |
– minimum 5% deposit from personal funds with the remaining 15% through a bank loan (for residents), – higher rates for foreigners |
| Occupancy requirements |
Once you buy a property, you cannot leave it empty for more than six months; Our Danish lawyers can explain this rule in detail for you. |
| Appealing decision by Department of Civil Affairs |
You cannot appeal the decision, but you can appeal to the Parliamentary Ombudsman. |
| Surveyor needed (YES/NO) |
NO |
| Taxes |
– property tax, – land tax, – real estate agent fees, – notary fees, etc. |
| Residence or citizenship by investment (YES/NO) |
NO |
| Types of available properties in Denmark |
– commercial, – residential (apartments, detached or terraced houses, co-operatives apartments, etc.) |
| Advantages of buying a property in Denmark |
– high-quality living, – stable real estate market, – legal protection, – possible rental income, – beautiful scenery, etc. |
| Assistance |
Our Danish law firm can help you obtain the permission from Department of Civil Affairs and buy a property in the country, guiding you in every step. |
| Local bank account required |
Our lawyers recommend opening a bank account to facilitate any real estate transactions. |
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Due diligence procedure |
– verify the property's ownership, – check zoning regulations, – conduct building inspections, – verify utility accessibility, – assess the financial aspects of the property, etc. |
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General documents needed for buying property |
– ID documents, – proof of residence, – proof of financial stability, – property purchase agreement, – property valuation report, etc. |
| Mandatory insurance (YES/NO) | NO |
| Cooperative housing (andelsbolig) |
You can buy shares in a cooperative housing association and live in a specific dwelling within the cooperative; Note this does not mean you own the property. |
| Constructing a house |
Requires obtaining the necessary building permits. |
| Content of property contract (købsaftale) |
– personal information about the buyer and seller, – property description, – purchase price, – payment terms, – possession date, – deposit terms, etc. |
| Legal framework for Danish real estate |
– Danish Purchase Act ("Købeloven), – The Rent Act (Lejeloven), – The Planning Act (Planloven), – The Building Act (Byggeloven), etc. |
| Land registry excerpt – characteristics |
Offers information on property ownership and any associated legal obligations. |
| Restrictions to agricultural lands (YES/NO) | NO |
| Registration of ownership |
At the Danish Land Registry (Tinglysningen) |
| Processing time for permission from the Department of Civil Affairs |
4 weeks (approx.) |
| Tax number required to buy property (YES/NO) |
YES |
| Documentation verification |
Our attorneys will verify the documents for the purchased property. |
| Additional services provided by our team |
– company formation, – accounting, – debt collection, – business consulting, – tax planning, etc. |
What are the services provided on buying property in Denmark?
Our Danish lawyers offer you their legal support during the process of purchasing property with:
- evaluate the legal aspects of your transaction;
- analyze the purchase contract;
- conduct due diligence on the property;
- help to transfer ownership.
What are the conditions for buying property in Denmark?
In order to buy a property in Denmark, a foreign citizen must:
- have his or her domicile in Denmark;
- have lived in Denmark for a minimum period of 5 years prior to the purchase;
- receive permission for the purchase from the Department of Civil Affairs, if the buyer does not meet the conditions above.
Special conditions are in place for purchasing properties for EEA/Swiss citizens. These foreign nationals can, under EU law, be subject to lighter rules, and receive an exemption from having to receive the permission of the authorities in order to buy a permanent dwelling.
We invite you to have a look on this infographic about how to purchase a property in Denmark:
What are the types of properties that can be bought in Denmark?
The type of real estate to be bought in Denmark are divided into:
- commercial properties;
- residential properties.
Residential properties are further categorized as:
- detached or terraced houses;
- apartments;
- co-operative apartments.
We invite you to watch a video about the property purchase requirements:
What type of documents are usually needed for buying property in Denmark?
The documentation of a property purchase in Denmark varies depending on whether the person buying is a resident or a non-resident of Denmark and the type of the property that is bought. Generally, the person who wishes to buy a Danish property needs to have:
- a valid passport or identification card;
- documents proving their place of residence, where necessary;
- proof of the source of funding, where required by the banks;
- mortgage or other loan documents, where applicable.
What is a permanent dwelling in Denmark?
A permanent dwelling refers to a property where an individual has their primary and permanent residence. He/she must be registered as living in the property in the Danish Civil Registration System (CPR). EU/EEA or Swiss citizens may purchase permanent dwellings in Denmark without the permission of the Department of Civil Affairs, under certain conditions.
What is a non-permanent dwelling in Denmark?
A non-permanent dwelling is usually a holiday home, apartment, or property where the individual does not live permanently and is not registered in the CPR. If you wish to purchase a non-permanent dwelling, you must apply for permission if you do not have domicile in Denmark or did not have residence in Denmark for at least 5 years.
Can buying a property in Denmark can be financed?
By law, individuals need a minimum down payment of 5% of the purchase price to buy a property in Denmark. However, banks may require foreigners to provide a higher down payment. The next 15% of the purchase price, if not covered by the buyer’s own funds, can be financed through a bank loan. The remaining 80% of the purchase price, ranging from 20% to 100%, can be financed through other bank loans.
What are the main characteristics of property taxes in Denmark?
Our lawyers in Denmark highlight some of the most important issues concerning property taxes below:
- The property tax is based on an assessment made by the authorities;
- The Danish Property Assessment Agency will generally be involved in this assessment every 2 years;
- A new system for assessment has entered into force in 2020; new property owners are informed of these rules, and any regular updates, as they take place;
- The basis for taxation is, generally, 0.92% of the value of the property up to 3,040,000 DKK and 3% when the value exceeds this amount;
- Business property owned by companies can also be subject to a different building tax of 1% of the building’s value.
What other expenses are to be taken into account besides the buying price?
The buying price is just one of the expenses associated with the purchase of property in Denmark. Other expenses include:
- transfer registration charges;
- charges for legal representation;
- banking charges;
- charges for technical evaluation/property evaluation, where relevant;
- home insurance costs.
What is the function of a real estate attorney during the purchasing process?
Even though a real estate lawyer is not obligatory for any purchases, he/she may facilitate the process and decrease possible risks. One of our attorneys may help with:
- analysis of the purchasing agreement;
- confirmation of the legal status of the property;
- determination of the buyer’s rights and responsibilities according to the contract;
- interaction with banks and governmental organizations;
- registration of ownership.
For full information on how to buy a property here, please contact our Danish lawyers. We can also help you open a company in Denmark.