Denmark - House purchase
The prices of real estate in Copenhagen have gone dramatically up in the past 5 years but they are still affordable if compared to other European capitals.
To get a general idea of the prices and availability take a look at www.boligsiden.dk a web site which publishes nearly all properties for sale. The site is in Danish only and the amount are in Danish Kroner (DKK).
To consult the site you would need to know the name of the area you are interested in, select it on the map, enter size, price and click on søg (search).
Useful words you might need:
Ejerlejlighed - apartment
Postnummer - zip code
Rækkehus - town house
Another useful website which gives info about the market in Denmark
Foreigners who are residents in Denmark are allowed to purchase property though, at times, an approval from the Ministry of Law is required. The property must be sold when leaving the country and the residence permit expires.
Foreigners are not allowed to purchase property approved only as part-time residence, such as summer cottages by the sea.
If you are interested in buying a property in Denmark and you are resident in Denmark (this means you have your CPR number) the procedure is the following:
- contact real estate agents to help you find the property. Estate agents in Denmark have a thorough training on the financial aspect and can advice you on mortgages.
- ensure your financial situation is clear. Banks or credit unions are very willing to lend you money using the property as collateral. Down payments are quite low, 10-20%.
- get a lawyer. This is not a must, you are allowed to handle this on your own, but particularly for foreigners it is strongly advisable as all paper-work is in Danish only. This lawyer will ensure the transaction is sound, obtain the needed approval from the Ministry if needed and assist you in making the deed.
- final step is signature from seller/buyer
Note: If you buy a house, remember to get the insurance in connection to the change of ownership. This insurance will cover you should something fail to be in the agreed condition or be malfunctioning within the first months after the change of ownership.
There are various property taxes in Denmark.
A state real estate tax roughly equivalent to 1% of the property value.
A county tax based on the land value of the property, which is about 1%.
A local tax based on the land value of the property (can vary from 0.5 to 2.5% depending on location)
If you own your residential property for more than three years you are exempt from capital gains tax on the profit you make on the sale.
Note: you must have lived in it yourself. Professional and commercial sales are excluded from this exemption.