Authored by the expert who managed and guided the team behind the Denmark Property Pack
Everything you need to know before buying real estate is included in our Denmark Property Pack
Are you considering investing in Denmark’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before making a purchase? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Be aware of Denmark’s “Summer House Rule” that limits vacation home purchases unless you’ve lived there for five years
You might be surprised to learn that Denmark has a "Summer House Rule," which restricts foreigners from buying vacation homes unless they have lived in Denmark for at least five years.
While over 6% of holiday homes in Sweden are owned by foreigners, Denmark takes a different approach. The Danish Ministry of Justice enforces a rule that requires foreigners to live in Denmark for at least five years before they can purchase a vacation home. This rule is not just a formality; if someone buys a property without meeting this requirement, they might have to sell it within six months.
Real estate agents often talk about how this rule impacts the market, especially in popular vacation spots. They note that it can affect property prices and limit the pool of potential buyers. This is quite a contrast to the more open policies in neighboring countries like Sweden.
For those considering buying a summer house in Denmark, it's crucial to understand these restrictions. The rule is strictly enforced, and not knowing about it could lead to unexpected complications. This might seem surprising, especially when you consider the more relaxed rules in nearby countries.
Despite these challenges, Denmark remains an attractive destination for many. Its beautiful landscapes and charming towns continue to draw interest from potential buyers. However, the "Summer House Rule" is a significant factor to consider if you're thinking about investing in a vacation property here.
Sources: Foreign Ownership and Expatriate Swedes’ Ownership of Holiday Homes in Sweden 2023, How to Buy a Summer House in Denmark
2) Consider investing in co-housing spaces in Denmark, as they are gaining popularity for community-oriented living
In Denmark, co-housing, or "bofællesskab," is becoming increasingly popular.
By 2023, cooperative housing units accounted for 8% of all housing in the country, with over 210,000 units available. This shows a clear trend towards community-oriented living, as more Danes are embracing the idea of shared spaces and resources.
The media has been instrumental in this shift, highlighting the benefits of co-housing, such as enhanced social connections and supportive communities. This coverage has sparked curiosity and interest, making co-housing a more mainstream option for many.
Societal changes are also driving this trend. With more people living alone, there's a growing need for community. In Denmark, 37% of adults were living solo by 2023, which suggests a strong potential market for co-housing solutions.
Looking ahead, the number of single-person households is expected to rise, with predictions that they could make up 40% or more of all households in OECD countries by 2025-30. This shift underscores the increasing appeal of co-housing as a way to combat isolation and foster community.
For those considering property investment, co-housing offers a unique opportunity. As Danes continue to seek out these community-focused living arrangements, there's potential for innovative property investments that cater to this growing demand.
Sources: Cooperative Housing Units in Denmark, Master's Thesis on Promoting Co-housing
In this video, we can see that co-housing (bofællesskab) is becoming increasingly popular in Denmark, providing opportunities for innovative investments in community-oriented living spaces.
3) Build a strong financial profile and relationship with a local bank, as Danish banks are conservative with lending
In Denmark, banks are known for being cautious with lending.
When you're looking to buy a property here, expect to put down a significant down payment. In 2023, the average loan-to-value ratio for residential mortgages was around 70-80%, meaning banks prefer borrowers who can contribute a substantial amount upfront. This approach ensures that they lend to those who are financially stable.
By 2024, Danish banks had maintained their strict lending criteria. They require thorough financial assessments and a stable income to approve a mortgage. This means having a strong financial profile is crucial if you're considering buying property in Denmark.
Another thing to keep in mind is the high credit score requirement. In 2023, a score of 750 or above was often necessary to secure a mortgage. This is higher than in many other countries, reflecting the banks' preference for lending to individuals with solid financial backgrounds.
Having a good relationship with a local bank can be advantageous, as Danish banks value trust and reliability in their clients. This can sometimes make the process smoother if you're planning to invest in property here.
So, if you're thinking about buying a home in Denmark, be prepared to show that you have a strong financial standing. This will help you navigate the conservative lending landscape more effectively.
Sources: Danish Financial Supervisory Authority, Finanstilsynet Annual Report 2024, Creditinfo
4) Avoid properties needing major renovations in Denmark, as strict building rules and high labor costs can reduce your profits
Buying a property in Denmark that needs a lot of work can be a real challenge.
Denmark has some of the highest labor costs in Europe, so hiring skilled workers can be pricey. A report by PwC pointed out that construction costs in Denmark are significantly higher than in other European countries, which can make renovation projects less profitable. This means that even a small renovation can quickly become expensive.
Denmark is also known for its strict building regulations, especially when it comes to environmental impact and sustainability. The Danish Building Regulations (BR18) have introduced new requirements for calculating the climate impact of new constructions. This can add extra layers of complexity and cost to renovation projects, making them more challenging than you might expect.
These regulations can lead to significant delays, particularly for complex structures like those along waterfronts. There are many case studies where renovation projects in Denmark have exceeded their budgets due to these regulatory hurdles. The new low-carbon strategy requires all new buildings to comply with stringent emission criteria, which can add significant costs to the project timeline and budget.
Getting building permits can be a lengthy process, involving multiple steps and regulatory checks. This can further delay projects and escalate costs, making it crucial to plan carefully. If you're considering a property that needs a lot of work, it's important to factor in these potential delays and costs.
In short, while Denmark offers beautiful properties, the combination of high labor costs and strict regulations can make renovations a costly affair. It's wise to consider properties that don't require extensive renovations to avoid these pitfalls.
Sources: Construction21, DLA Piper Real World, PwC, Global Property Guide
5) Consider energy-efficient properties in Denmark, as sustainability leadership and green certifications are highly valued by buyers
Investing in energy-efficient properties in Denmark is a smart way to boost your profits.
Denmark is a global leader in sustainability, consistently ranking high in the Global Green Economy Index. This reflects the country's strong focus on sustainable practices and well-thought-out government policies. Buyers in Denmark often prioritize homes with green certifications, aligning with the cultural and governmental emphasis on sustainability.
While specific statistics on the rise of energy-efficient property sales aren't available, the trend towards sustainability indicates a growing market for these homes. The Danish government sweetens the deal with incentives for energy-efficient home renovations and purchases. For instance, the Danish Climate Agreement for energy and industry, established in 2020, includes subsidies for replacing oil and gas boilers with more sustainable options like heat pumps and district heating.
These incentives make energy-efficient properties even more attractive to buyers, who are increasingly looking for homes that align with their environmental values. The strong government support further encourages investment in these properties, making it a lucrative opportunity for investors.
Denmark's commitment to sustainability is evident in its policies and incentives, which not only benefit the environment but also offer financial advantages to property investors. By focusing on energy-efficient homes, you can tap into a market that is both profitable and environmentally responsible.
Sources: State of Green, Danish Ministry of Climate, Energy and Utilities, Odyssee-Mure
From this video, we realize that energy efficiency and green certifications are priorities in the Danish real estate market, aligning with Denmark's leadership in sustainability.
6) Consider Denmark’s stable real estate market for safer long-term investments, as it’s less volatile than other countries
The Danish real estate market is known for its remarkable stability.
Even during global financial upheavals, Denmark's property prices have shown minimal fluctuations. For instance, while house prices surged between 2003 and 2007, the subsequent decline was much less severe than in many other countries.
In 2023, there was a slight dip in house prices, but experts predict a modest increase in 2024, suggesting a steady trend. This consistency is echoed by reports from real estate agencies and the Danish National Bank, which frequently emphasize the market's reliable conditions.
One reason for this stability is the low level of speculative buying in Denmark. Unlike markets driven by quick profits, Denmark's real estate is more about long-term investments, which helps keep things stable.
Sources: Global Property Guide, Trading Economics, Fitch Ratings
7) Consider Denmark’s “Andelsbolig” system for affordable entry, as you buy shares in a cooperative rather than owning the property outright
Denmark offers a unique way to own a home through the "Andelsbolig" system, where you buy shares in a cooperative housing association instead of owning the property outright.
This system is particularly popular in cities like Copenhagen, where about a third of all housing falls under this category. It's often a more affordable way to enter the housing market, especially in urban areas where property prices can be steep.
Buying shares in an Andelsbolig is generally cheaper than purchasing a traditional property, but costs can vary widely depending on the location and type of property. This affordability is partly due to Denmark's mortgage market, which offers long-term, fixed-rate loans tied to government bonds.
One of the perks of living in an Andelsbolig is that maintenance and major improvements are shared among residents. This can be a relief compared to traditional homeownership, where such responsibilities fall solely on the individual owner.
However, the cooperative nature of Andelsbolig also means that financial decisions are made collectively, which can sometimes be a challenge. Residents need to agree on expenses for ongoing maintenance and improvements, ensuring financial stability for the community.
So, if you're considering buying property in Denmark, the Andelsbolig system offers a unique and potentially more affordable option, especially in bustling cities like Copenhagen.
Sources: Lawyers in Denmark, TU Delft OPEN Books, SPUR
8) Consider properties in Copenhagen’s Ørestad district, as its modern architecture and city center proximity attract young professionals
Ørestad is quickly becoming the go-to spot for young professionals in Copenhagen.
One big reason for this is the notable rise in property prices in the area. In 2024, the average apartment price in Ørestad was higher than in other parts of Copenhagen, and experts predict a 2% to 4% increase in 2025. This makes it a hot market for those looking to invest.
Another factor is the 10.3% increase in property transactions in the Capital Region, which includes Ørestad, during the first three quarters of 2023. This surge in sales shows a growing interest, largely due to the district's modern architecture and urban vibe.
Ørestad is also drawing in a lot of young professionals, thanks to its close proximity to the city center and modern amenities. This demographic shift is expected to continue, especially with new urban regeneration projects on the horizon.
These projects are set to make Ørestad even more appealing, adding to its already attractive mix of urban nature and world-class architecture. The district's unique blend of modern living and convenience is a big draw for those looking to settle in Copenhagen.
Understanding these trends can give you an edge if you're considering buying property in the area. Ørestad's combination of rising property values, increased sales, and a young, professional demographic makes it a compelling choice.
Sources: Visit Copenhagen, Global Property Guide, Wonderful Copenhagen
We made this infographic to show you how property prices in Denmark compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Time your purchase in Denmark when interest rates are low to boost your investment returns
Interest rates are a big deal in the Danish property market.
Back in 2023 and 2024, high rates made buying a home tough. Prices dropped because borrowing got pricey, and people hesitated to buy. This meant fewer homes were sold, and the market felt the pinch.
In 2022, the 30-year fixed-rate mortgage in Denmark jumped by about 4 percentage points. This was the biggest hike in 40 years, making homes less affordable and slowing down sales. It was a rough patch for anyone looking to buy.
Experts, like those from the Vismænd economic council, say things will get better. By 2025, house prices are expected to rise by 6% annually. This suggests a rebound, so keeping an eye on interest rates could be key to a smart buy.
Timing is everything. When rates are low, your investment returns can be much better. So, if you're thinking of buying, watch those rates closely.
Sources: Copenhagen Post, Danish National Bank, Trading Economics
10) Consider investing in Denmark’s university cities like Aarhus and Aalborg
Denmark's rental market is booming, especially in university cities like Aarhus and Aalborg, where student housing demand is consistently high.
In these cities, occupancy rates for student housing are through the roof, making it tough to find a place. The limited supply of available units means that competition is fierce, and everyone is scrambling to secure a spot.
Rental prices are climbing steadily. While European rental rates jumped by 4.3% in 2024, cities like Aarhus and Aalborg are seeing similar trends. The shortage of student accommodation is pushing prices even higher, making it a landlord's market.
Students usually prefer renting over buying since their stay is often temporary. This preference keeps the demand for rentals high. In fact, real estate in these university towns is quite profitable because of the steady stream of students looking for housing.
Investing in rental properties here is a smart move. With consistent demand from students, landlords can expect a reliable income. The strong rental market in these areas is a testament to the thriving student population.
Denmark's university cities are a hotspot for rental investments, thanks to the ever-growing student population and their housing needs. If you're considering buying property, these cities offer a promising opportunity.
Sources: ICEF Monitor, Erudera, Global Property Guide
11) Be cautious of the "Blackstone Effect," as foreign investment in rentals may lead to regulatory scrutiny and changes in rental laws
Denmark is seeing a big wave of foreign investment in its rental property market.
Companies like Blackstone are diving in, and this has sparked worries about housing affordability for locals. People are concerned that these investments might make it tougher for residents to find homes they can afford. The buzz around town is that this could lead to a squeeze on the housing market, making it less accessible for everyday folks.
Public protests and media outlets are shining a light on these issues, with many voices raising alarms about tenant security and rising costs. The rapid pace of foreign ownership has stirred up quite a bit of unrest, with locals feeling the pinch and fearing they might be priced out of their neighborhoods. This has put the government in the hot seat, urging them to step in and address these concerns.
In response, the Danish government is rolling out some proposed changes to the laws governing property investments. They're looking at tighter controls on rent hikes and considering exemptions for buildings that are new or have been improved. It's a tricky balancing act, as they aim to foster economic growth while ensuring that residents aren't pushed out of their homes.
Insiders say that these legislative moves are a direct reaction to the so-called "Blackstone Effect," where aggressive foreign investments have led to increased scrutiny and potential shifts in rental laws. The government is keen on finding a middle ground that supports both economic interests and the housing needs of its citizens.
As the situation unfolds, it's clear that the Danish housing market is at a crossroads, with the government trying to navigate the complex landscape of foreign investment and local housing needs. The outcome of these proposed changes could set a precedent for how other countries handle similar challenges in the future.
Sources: AMWatch, Housing2030, PwC
Buying real estate in Denmarkcan be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
12) Invest in modest, well-designed homes in Denmark, as the "Jante Law" mindset makes flashy properties less appealing to local buyers
In Denmark, the cultural mindset known as the "Jante Law" means flashy properties might not be as appealing to local buyers.
You'll notice that architectural trends lean towards simplicity and functionality, reflecting this cultural attitude. The love for Scandinavian-inspired furniture and eco-friendly home accessories is a testament to the Danish preference for modesty in home design.
When you look at surveys and consumer behavior studies, they show that Danish consumers favor minimalist and functional designs. They appreciate clean lines, natural materials, and sustainability, which are evident in the popular products on the market.
In the real estate market, there's a noticeable trend: modest, well-designed homes are in higher demand. These properties align with the cultural values of humility and functionality, and they tend to hold their value better than more ostentatious ones.
Successful property investments in Denmark often highlight non-flashy homes that are well-designed and functional. These homes attract local buyers who appreciate simplicity and modesty, as noted by cultural analysts and real estate agents.
Historical data on property sales in Denmark consistently shows a preference for modest, well-designed homes over flashy properties. This trend is closely tied to the cultural influence of the Jante Law.
Sources: Nordgreen, Statista, Youth Journalism
13) Expect delays in Denmark, as registering a “skøde” (deed) with the Land Registry can take weeks
In Denmark, buying property involves registering a "skøde" (deed) with the Danish Land Registry, a process that can take several weeks, so patience is key.
Many are surprised by how long it takes to register a property in Denmark. The process is not just about paperwork; more expensive properties often take longer to appear in the database. This delay is due to the detailed checks required, which can extend the timeline.
Real estate agents and buyers often talk about these waiting periods. It's a common topic among those navigating the Danish property market. Legal experts frequently remind international clients that the registration process is lengthy, and patience is part of the deal.
Expats and international buyers share stories of waiting, which helps others understand what to expect. Danish real estate professionals stress the importance of patience, as the process is complex. Even with electronic systems, the registration time hasn't changed much over the years.
Despite the modern systems in place, the historical data shows that the registration process remains consistent in its duration. This consistency is due to the centralized and detailed legal framework that governs property transactions in Denmark.
Understanding this process is crucial for anyone looking to buy property in Denmark. The central registration requirement makes it more complex compared to some other countries, but it's a necessary step to ensure everything is in order.
Sources: Statistics Denmark, Carsted Rosenberg
14) Factor Denmark’s high property tax rate into your long-term investment plans to avoid unexpected costs
When considering buying property in Denmark, remember that the country has a high property tax rate.
In 2023 and 2024, Denmark's property tax rates were notably higher than those in countries like the UK. This isn't just a minor detail; it can significantly impact your investment over time. While there have been some reductions in property value tax rates, these taxes remain a crucial part of Denmark's municipal budgets. This means that property taxes are a major revenue source for local governments, and they can vary depending on the location.
If you're planning to invest in real estate here, be prepared for these costs. Real estate market analyses and financial advisories often stress the importance of considering property taxes when making investment plans. These taxes can affect the overall affordability and profitability of your investment. By factoring in these costs from the start, you can avoid any unpleasant surprises down the road.
In Denmark, property taxes are not just a financial obligation; they are a significant part of the local economy. This is why it's essential to understand how these taxes work and how they can impact your investment. Property taxes can vary quite a bit depending on where you are in Denmark, so it's crucial to do your research and plan accordingly.
For instance, in some areas, the property tax rate might be higher due to the demand for housing or the local government's budget needs. This means that your investment could be more expensive than you initially anticipated. Understanding these nuances can help you make a more informed decision about where to invest.
Ultimately, being aware of Denmark's property tax rates and how they can affect your investment is crucial. By doing your homework and planning ahead, you can ensure that your investment is both affordable and profitable. Don't let unexpected costs catch you off guard; make sure to factor in these taxes when calculating your long-term investment strategy.
Sources: Schjodt, Sheltons Group, Statistics Denmark, Global Property Guide
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Denmark. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Consider properties near Copenhagen’s metro, as they hold value better and attract more tenants due to efficient public transport access
Buying a property near Copenhagen's metro is a smart move.
Homes close to the metro have seen a significant rise in value. For instance, in Q3 2023, the average price of owner-occupied flats went up by 1.2% year-over-year, even as the broader market slowed down. This shows that demand for these properties is strong, helping them maintain their value.
The metro has also boosted rental demand, especially among well-educated individuals who love the convenience of public transport. Areas like Indre By and Østerbro are seeing higher occupancy rates, with luxury housing projects thriving due to their metro proximity.
Historically, properties near metro stations have appreciated significantly. The total added value from the metro is about 40% of its construction cost, underscoring the long-term benefits of investing in these areas.
Living near the metro means easy access to the city, which is a big draw for tenants. This accessibility keeps demand high, ensuring that properties in these areas remain attractive to both buyers and renters.
Investing in a property near the metro isn't just about convenience; it's about making a smart financial decision. The metro's impact on property values is clear, making it a key factor for anyone considering a purchase in Copenhagen.
Sources: Global Property Guide, CBS Research, Econstor
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.