Owning houses in Denmark as a foreigner on a Temporary Residence Permit 

There is nothing as exciting and worth being proud about for a foreigner like owning houses or even a single house in Denmark. You have probably read about or talked to those dollar millionaires giving stories of their apartments in exotic places like Mar-a-Lago and Palm Beach in the USA; exclusive neighbourhoods of Christianshavn and Holmen in Copenhagen and many such. So many long to have such houses too, at least at one point when finances allow or a loan facility become available.

For any foreigner taking off from their home country to Denmark, such are the big dreams that they carry along-to own a property worth writing home about. But it is one thing to carry a dream and another thing altogether to actualise it depending on the controlling rules. 

One thing that must be emphasized from the word go is that as a foreigner in Denmark, your residence and other rights have limitations. Until the point when you luckily get a Danish citizenship, it may be inconvenient to live by the set laws but then that is what prevails anyways. This reality may apply for home and apartment ownership which actually forms the basis of this article.

Buying and owning a house or apartment in Denmark

So you just moved to Denmark and thinking of buying a house? It makes sense that one would want to own property in Denmark. Denmark is considered one of the happiest counties in the world. While the cities are generally vibrant, the countryside is nothing if not breath-taking.  Besides, in Denmark you are assured of a great healthcare system and mild weather. Who wouldn’t want an excellent living standard?  

As a foreigner you surely need a place to live. Being new in Denmark, you’ll probably find it challenging to understand or follow through the process of buying a house. There are rules and regulations that you must follow to own a house in Denmark. Don’t worry though because we got your back. Here’s everything you need to know about owning a house in Denmark.  

Overview of the Housing Market in Denmark 

The Covid-19 pandemic affected the housing market in every country including Denmark. Nevertheless, the market has managed to remain fairly manageable. In 2019, right before the pandemic, the prices of houses in Denmark had risen by approximately 3%. This was followed by a reduction in the number of transactions once Covid was declared a global pandemic.  Interestingly, house prices went up by 1.6% that year. Once the economy began to recover, demand for houses increased and prices continued to rise. 

Rules for Buying Houses in Denmark as a Foreigner

Whether you are planning to buy a detached house, construction plot, owner-occupied apartment, holiday home, or a cooperative housing unit (andelsbolig) in Denmark, there are conditions involved. The rules  will apply regardless of how you plan to utilize the house (a permanent or non-permanent dwelling).

Denmark is well known for advocating and practicing liberalism. However, foreigners owning property is where they draw the line. The country has put in place many restrictions when it comes to owning a house as a foreigner. So you are likely to encounter many challenges in your endeavor. 

A typical posh bungalow up for purchase

The first rule to owning a house is that you must have lived in Denmark previously for a period of five years or more. Tricky right? But just wait. There’s more. You must also be currently working in Denmark (EU nationals only) or have a valid residence or business permit (non-EU nationals). Finally, you are obligated to ask for permission from the Danish Department of Civil Affairs. 

Buying a House in Denmark as a Foreigner

Assuming you meet the conditions necessary for owning houses in Denmark, you are ready to buy your property. You will need to be careful when choosing the area you want to buy the house in. To protect some places such as popular coastal regions, the government has placed special restrictions. The restrictions prevent foreigners from owning property to protect the regions from having too many foreign property owners.

What if you don’t meet the conditions stated above for owning a house in Denmark? Don’t worry. You still have options. Certain circumstances or factors can still enable you to own a house in Denmark. For instance, you can create your own local limited company, an ApS (Anpartsselskab), which can then buy the property for you and help you fulfill your dream.

The Cost of Buying a House in Denmark

At this point it’s probably not surprising to you that the cost of living in Denmark is very high. Thus, you can expect the same logic to apply to the price of houses. The costs you incur will differ based on the type of house and where it is located. For example, if it’s located at a city center and you’ll find yourself paying a premium. Similarly, if you are buying a house located in the city outskirts, you’ll find it more affordable. 

Taxes and fees involved when buying a House in Denmark 

Aside from the original property price, you’ll also be expected to pay other costs such as taxes and fees. Some examples of these include; 

  1. Solicitor’s fee – 0.1% to 0.5% (plus 25% VAT)
  2. Registration fee – 1,400 DKK (approx. £162) + 0.6%
  3. Mortgage fees – 0.1% arrangement fee + fixed opening fee of approx. £258

How to Find a House to Buy in Denmark 

Let’s assume you have the money to actually buy a house in Denmark. Again let’s trust that you have met all the conditions set for you as a foreigner to own such property in the country. The next probable question is how to find that dream house to buy, right? Here is the guide:

Property agencies and agents in Denmark

The best way to find a house to buy in Denmark is through an estate agent. The agents will have useful insights on the local housing market. Thus, they will make the process of acquiring the house simpler and more informed. Remember though that they will charge a fee of around 0.5% to 2% of the purchase price. This shouldn’t worry you much because the seller will pay them. 

Danish housing property websites

Property websites can also be helpful in identifying the house to buy. You can conduct the search yourself as long as you can access the internet. The websites mostly have online portals and real estate listing sites. Some people opt to use brokers who have specialized in international property sales.