You will be taxed on some of your rental income if you rent out your holiday home. You can choose between a standard tax deduction or an accounting tax deduction (in Danish regnskabsmæssigt fradrag).

Enter your rental income in your tax assessment notice

Enter your rental income in your preliminary income assessment

  • In 2021, the first DKK 11,700 (DKK 11,500 in 2020) are tax exempt per holiday home if you rent it out as a private individual.
  • In 2021, the first DKK 42,700 (DKK 60,000 in 2020) are tax exempt per holiday home if you rent it out via an agency.
  • Rental income in excess of the above amounts are taxed at a rate of 60%.

Your actual expenses are not deductible.

Example of renting out as a private individual
Renting out DKK
Rental income, incl. electricity, heating and water 33,800
Standard deduction -11,700
Income in excess of standard deduction 22,100
Taxable income (60% of DKK 22,100) 13,260

State the taxable income on your tax assessment notice, box 37

You are entitled to a full standard deduction even if you buy or sell your holiday home during the year.

If you choose to make use of the accounting deduction, you will be taxed on your rental income minus the actual expenses. This income is considered income from capital.

Enter your income minus your expenses in box 37 in your tax assessment notice and in field 218 in your preliminary income assessment.

You should keep a record of rental income and expenses that you must be able to present to us upon request. You must have receipts for items you are deducting.

Income:

The rental income is the total amount you receive, including payment for electricity, water and heating, for example.

Expenses:

You are entitled to deduct expenses you incur in the period you rent out your holiday home.

  • Expenses directly related to renting out your holiday home, advertising expenses, for example.
  • Electricity, water, heating, for example.
  • Maintenance expenses and depreciation of fittings and furniture (domestic appliances excepted).
  • You are not entitled to deduct maintenance expenses related to the actual property.

If you use the accounting deduction method, you cannot revert to the standard deduction.

Land tax deduction (property tax)

You can deduct your land tax for the weeks you rent out your holiday home. A year has 52 weeks, so if you rent out your holiday home for four weeks, for example, you can deduct 4/52 of your land tax as an expense.

Property value tax relief

You do not have to pay property value tax for the period you rent out your holiday home. You obtain the relief by entering the rental period in your tax assessment notice.

Example: 8 weeks of rental
Renting out DKK
Rental income, including electricity, heating and water 33,600
Expenses for electricity, heating and water in the rental period -3,600
Proportional part of house contents insurance (8/52) -1,000
Proportional part of house contents insurance (8/52) -1,000
Proportional part of expenses for maintenance of furniture (8/52) -1,000
Proportional part of land tax (8/52) -2,000
Advertising expenses -3,000
Rental income to be reported 22,000

If you rent out your holiday home via an agency that reports to us, you automatically obtain the standard deduction.

  • In 2021, the standard deduction is DKK 42,700 (DKK 60,000 in 2020). 

If you are paying for electricity, heating, water, final cleaning, etc. you need to add the relevant amount in box 37 in your tax assessment notice.

If you co-own the holiday home, we distribute the rental income and standard deduction between the owners according to how much you each own.

If you have only owned the holiday home for part of the year, you need to enter the taxable amount in box 37, as we are unable to distribute the rental income on the buyer and the seller. The agency reports rental income by means of the property number of the specific holiday home and not the owner.

If you want the accounting deductions to apply to you, you need to enter your income minus your actual expenses in box 37 in your tax assessment notice.

Renting out via a non-Danish agency

In order for you to obtain the standard deduction, the non-Danish agency needs to register with and report your rental income to us. Please refer the agency to our website for further information:

Information for agencies outside Denmark renting out holiday homes for owners resident in Denmark

The agency may ask you for the property number of your holiday home. You can look it up here www.ois.dk. Please note that the link is in Danish.

If you rent out your holiday home privately in addition to letting an agency rent it out, you need to pay 60% tax of the rental income you earn on the private rental.

If your income from the agency rental is less than the standard deduction for renting out your holiday home privately, which is DKK 11,500 in 2020 (DKK 11,200 in 2019), you are entitled to deduct the remaining amount of your basic allowance before calculating your taxable income.

You need to enter you taxable income in box 37 of your tax assessment notice.

Example: Agency rented out for less than DKK 11,500
Renting out DKK
Rental income from agency incl. electricity, water and heating 5,200
Standard deduction not used: DKK 11,700 - DKK 5,200 =  6,500
Rental income from private rental, incl. electricity, water and heating 10,000
Private income less the remaining standard deduction: DKK 10,000 - DKK 6,500 kr.= 3,500
Taxable income: DKK 3,5000 x 60% = 2,100

 

Example: Agency rented out for more than DKK 11,500
Renting out DKK
Rental income from agency, incl. electricity, water and heating 15,000
Rental income from private rental, incl. electricity, water and heating 10,000
Taxable income: DKK 10,000 x 60% = 6,000

If you only use your holiday home for renting out, it is considered commercial rental. Commercial rental of holiday homes requires an authorisation from the Danish Nature Agency (Naturstyrelsen). Generally, the Nature Agency does not issue such authorisation.

Naturstyrelsen