Are you considering a move to Denmark or selling a property in Denmark? Whether you plan to visit for a short amount of time or intend to remain long-term, it’s important to familiarize yourself with the rules and laws surrounding property purchases in Denmark. Buying a home in Denmark can be daunting for the average foreigner, as there are many restrictions on who can buy and how much they can purchase. In this post, we will provide an overview of how to buy property in Denmark as a foreign individual or company so that you have all the information you need before making your decision.
Denmark’s Property Market
Denmark’s property market has been on an upwards trajectory in recent years, with prices in the country’s capital city of Copenhagen rising by around 10% in 2017 alone.
Despite this, Denmark remains an attractive proposition for foreign investors looking to purchase property, with a number of factors working in its favour. These include its stable political and economic environment, as well as its high quality of life – Copenhagen was recently named the world’s most liveable city.
If you’re considering purchasing property in Denmark, here is an overview of what you need to know:
- The process is relatively straightforward
Compared to some other countries, the process of buying property in Denmark is relatively straightforward. There are no restrictions on foreigners buying property, and the whole process can be completed in as little as six weeks.
- You’ll need a deposit
As with most countries, you will need to put down a deposit of around 10% of the purchase price before your offer on a property is accepted. In addition, it’s worth bearing in mind that closing costs (such as stamp duty) will add around 2-3% to the overall cost of your purchase.
- You may need a mortgage
Unless you’re paying for your property in cash, you will likely need to take out a mortgage. Danish banks are typically willing to lend up to 80% of the value of a property,
The Buying Process
The process of buying property in Denmark as a foreigner is not as complicated as one might think. There are, however, a few key steps that must be followed in order to ensure a smooth and successful transaction.
- Choose the right property: It is important to take into consideration factors such as location, size, and type of property before making a purchase.
- Find a qualified real estate agent: A qualified real estate agent will be familiar with the Danish property market and will be able to help you find the right property to suit your needs.
- Get a mortgage: In order to finance your purchase, you will need to apply for a mortgage from a Danish bank. It is important to shop around for the best interest rates and terms before applying for a loan.
- Make an offer: Once you have found the perfect property, it is time to make an offer. The real estate agent will negotiate on your behalf with the seller in order to reach an agreement on price and other conditions of the sale.
- Close the deal: Once both parties have agreed on all terms of the sale, the paperwork will be signed and the transaction will be finalized.
Types of Properties
There are four different types of properties in Denmark:
- Residential property – this includes both apartments and houses, and can be used for either personal or investment purposes.
- Commercial property – this type of property is used solely for business purposes, and includes office buildings, retail space, and industrial facilities.
- Agricultural property – this encompasses farmland, forests, and other land used for farming or other agricultural activities.
- Specialty property – this category covers a wide range of properties with special characteristics, such as historic buildings, vacation homes, and natural landmarks.
Required Documentation
If you want to buy property in Denmark as a foreigner, there are a few required documents that you need to have in order.
First, you need to have a passport that is valid for at least three months after your planned departure from Denmark. You also need to have a residence permit if you are not a citizen of an EU/EEA country or Switzerland.
Next, you will need to show proof of financial means. This can be in the form of a bank statement or payslips. If you are self-employed, you will need to provide your most recent tax return.
Finally, you will need to sign a purchase contract (Køberaftale). This document outlines the terms of the sale and includes information on the property, the buyer, and the seller.
Fees and Taxes
When looking to purchase property in Denmark as a foreigner, it is important to be aware of the fees and taxes that may be applicable. For example, there is a transfer tax of 2% on all property purchases which is payable to the Danish government. Additionally, there is a registration fee of 0.6% on all properties worth more than DKK 100,000 (approx. EUR 13,000).
There may also be other costs associated with buying property in Denmark as a foreigner, such as solicitor’s fees, valuation fees and mortgage arrangement fees. It is therefore important to get an estimate of all potential costs before proceeding with any purchase.
Tips for Buying Property in Denmark
Denmark is a great place to buy property, but there are a few things you should keep in mind as a foreigner. Here are some tips for buying property in Denmark:
- Do your research: Before you start looking at properties, it’s important to do your research and learn about the Danish property market. This will help you understand the prices and find the right property for you.
- Get a mortgage: It’s difficult to get a mortgage as a foreigner in Denmark, but it’s possible if you work with the right lender. Be sure to compare interest rates and fees before you choose a lender.
- Find a good real estate agent: A good real estate agent can help you find the right property and negotiate the best price. Make sure you choose an agent who is experienced in working with foreigners.
- Know the costs: There are various costs associated with buying property in Denmark, including stamp duty, registration fees, and legal fees. Be sure to budget for these costs when planning your purchase.
- Understand the process: The process of buying property in Denmark can be different from what you’re used to in your home country. Be sure to work with a professional who can guide you through the process and help make it as smooth as possible.
Conclusion
We hope this article has provided you with some useful information on how to purchase property in Denmark as a foreigner. It is important to remember that each country has its own unique set of rules and regulations, so it is best to thoroughly research the laws and requirements before making any decisions. Additionally, working with an experienced real estate agent or lawyer can be helpful when navigating the process. With careful planning and research, buying property in Denmark as a foreigner can be a rewarding experience!
