Housing Allowance in Denmark and how it Works 

Moving to and living  in Denmark is generally very expensive whether you are a student or employed. At least most of those who have gone through the process can testify to how draining it can be. By the time you finally lay your hand on the NemID, get your CPR and the famous Yellow Card, it shall have been a real toil. There are so much that one needs to go through to benefit from the social welfare schemes in Denmark. Even to qualify for housing allowance needs you pass a couple of checks for qualification. This is not to mean that the process has been made deliberately inconvenient to stop people from coming. No, it’s just the bureaucracy of making things work correctly.

For expats arriving at the various entry points to Denmark each day,  housing remains a critical priority issue. The average cost of a one-bedroom apartment in Denmark is anything between EUR 500 and 1,350. Thus, knowing a thing or two about housing allowance will save you a few Burks.

So, what is a housing allowance in Denmark? Housing allowance in simple terms is a block grant offered to help you pay your rent. Under special circumstances, it allows you to borrow to pay for deposits. If you live in Denmark and are renting a house, you can apply for housing allowance. Even those planning to stay in Denmark temporarily can apply for a house allowance. But you have to live at the residence you are applying for on a permanent basis to get housing benefit.

Overview of Housing Allowance in Denmark 

Housing allowance in Denmark is known as Boligstøtte. In Denmark, the benefits disbursement authority or Udbetaling Danmark takes care of the housing allowance . There is no tax deducted from the housing allowance. The housing allowance is paid as a loan if you live in cooperative housing or owner-occupied homes. 

Renting and moving into your apartment in Denmark

The housing allowance is provided to people who rent a house with its own kitchen. However, you have to stay there for a whole year. Housing allowance is available to pensioners and early-retirees. Udbetaling Danmark also provides housing allowance to individuals on disability pension, cooperative housing society and owner-occupiers. However, for cooperative housing societies, you can only apply if you retire early or are on disability pension. 

Housing Deposit in Denmark 

Housing deposit loan in Denmark covers the entire deposit and is paid to the housing association. The deposit loan  is available to people renting from a public-sector landlord. You can apply for these loans if you live in an apartment or a single room. Nevertheless, those who live in social youth housing without a self-contained kitchen cannot apply for a deposit loan.

So, if the house you are renting is located in Gentofte Kommune, you can apply for a deposit loan and make your financial life a little easier. Similarly, if your house is part of the subsidized housing scheme, you are qualified for a deposit loan. Deposit loans can also be extended to those who live in homes that were first occupied after 1 April 1964. Finally, if your household income is not more than DKK 216,241 – add DKK 38,000 per child up to 4 children.

Check if your chosen apartment in Denmark qualifies you for housing benefit

The downside of the deposit loan is that you have to pay back at some point. So I would recommend you apply for it only if and when you really need it. You will not be required to pay any interests or installment for the initial five years.  A fixed interest rate of 4.5% p.a. applies after the five years have elapsed. So ensure you have an effective repayment plan in place if you get the loan. 

How much Housing Allowance can I Get? 

The amount of housing allowance that can be provided to you depends on several factors. These factors include; the rent, home size, household income and the number of people in your household. Your age might also impact the amount of housing allowance that you will receive.  The Udbetaling Danmark calculates  your allowance based on the cost of the accommodation and household income. 

Only one person can receive housing allowance if you live in a house with many people. In such a case, the person submitting the application will receive the allowance. It could also be paid to the housing association so that they can subtract it from your rent. If you sub-let, be sure that your landlord made the National Register aware that they don’t live there anymore.

What Happens to my Housing Allowance if/when my Circumstances Change? 

It is your obligation to inform  Udbetaling Danmark of any changes to your living arrangements. These changes could be related to; 

  • Moving out
  • Renting your house (tenant)
  • Increase/decrease in rent
  • Change in assets
  • Income changes
  • Death of a household member
  • If a household member moves out
  • If you acquire your home as part of a housing cooperative or assume full ownership
  • If you live in the home less than half the time of your tenancy   

In turn, Udbetaling Danmark will send you letters to keep you informed on the ongoing basis of your housing allowance.  Its only income changes of more than DKK 800 within a month will lead to a change in your allowance.   However, Udbetaling Danmark will continue to calculate your allowance once every year. 

What Happens to my Housing Allowance when I Lose My Job? 

You are also expected to notify Udbetaling Danmark if you quit or lose your job. As soon as your employer transfers your holiday pay to FerieKonto and the Danish Tax Authority.  Udbetaling Danmark will count it as income even if you have not received it yet. Thus, you can expect to receive a lower amount in housing allowance. However, by the time you receive it, it won’t count as income anymore.