Renting out a room or a home you live in

1. You use your rental income and one of the two standard deductions.
   Which of the two above standard deductions you should use depends on whether you rent out via platform or not.
   
   If you share the rent or the co-own the home with others, you are only entitled to part of the standard deduction. Read more about this in If you share the rent or co-own the home with others. 
   
   The rental income includes payment for water, electricity, heat and internet, for example.
    
2. Deduct the standard deduction from your rental income.
3. Then deduct 40% - we call this a 40% reduction.
   You do so because you only have to pay tax on 60% of the income that exceeds your standard deduction when you provide short-term rental.
   
   
4. Now you have the amount that you will be taxed on (meaning your taxable income)
5. Enter your taxable income in your tax assessment notice in box 37.
   You pay tax throughout the year by entering the income in your preliminary income assessment in field 218.

If the amount is DKK 0 or less, you do not have to enter anything.

See specific examples of calculating the taxable income below.

This means that you cannot deduct expenses such as electricity, water and heating or your land tax (property tax). And you are not entitled to property tax relief when you use your standard deduction.

If you share the rent or co-own the home with others, you are generally only entitled to a deduction corresponding to your part of the rent or share of ownership.

However, sometimes there may be more than one standard deduction per all-year home. 

When you co-own the home with others

If you co-own the home with your spouse or partner, for example, you share the standard deduction between you. 

If you own 50% of the home, you are entitled to 50% of the standard deduction.

When you live with other people and you share the rent between you

If you share the rent with others, you also share the standard deduction.

If, for example, you pay 25% of the rent, you are entitled to 25% of the standard deduction.

When you live with other people and you each have your own rent

If you live with others and you are each paying your own rent to the landlord, each of you are entitled to a standard deduction which you do not have to share with the others. 

As a result, you are entitled to the entire standard deduction.

Example: Rental of owner-occupied home that is co-owned with others

Mark owns 50% of his owner-occupied home and as a result he is only entitled to 50% of the standard deduction (50% of DKK 29,900). His rental income is DKK 45,000 including payment for electricity, water and heating for renting out his home via a platform.

In this example, Mark has to pay tax on DKK 18,030, and he enters this amount (his taxable income) in his tax assessment notice in box 37.

Example: Renting out a rented home where the rent is shared

Aylin shares a rental home with three friends and pays 25% of the total rent. As a result, she is entitled to 25% of the standard deduction. Aylin has rented out her room via a platform several times during the year and her rental income is DKK 25,000.

In this example, Aylin has to pay tax on DKK 11,515 and she enters this amount (her taxable income) in her tax assessment notice in box 37.

Standard deduction and rental via a platform

When you rent out your home via a platform and the platform declares your income to us, your standard deduction is DKK 31,200 in 2023 (DKK 30,300 in 2022).

Example: Renting out via a platform

Eric has rented out a room of his home via a platform a couple of times during the year and the platform declares his income to us. Therefore, Eric is entitled to a standard deduction of DKK 30,300 (2022). His annual rental income is DKK 39,000 including payment for electricity, water and heating.

In this example, Eric has to pay tax on DKK 5,220. He declares this amount (his taxable income) in his tax assessment notice in box 37. 

Standard deduction when you rent out privately

If you rent out your home privately, or if the platform you use does not declare your rental income to us, the standard deduction is DKK 12,200 in 2023 (DKK 11,900 in 2022).

Example: Renting out privately

Lisa rents out her home to a couple she has met via friends. This means that she has privately and with no use of a platform rented out her home and as a result, her standard deduction is DKK 11,900 in 2022. Her annual rental income is DKK 33,600 including payment for electricity, heating and water.

In this example, Lisa has to pay tax on DKK 13,020 and she enters this amount (her taxable income) in her tax assessment notice in box 37.

If you rent out both via a platform and privately, you have to use the standard deduction on the rental income from the platform. Next, you have to pay tax on 60% of the income from your private renting (what we call a 40% reduction).

If your income via the platform is less than DKK 12,200 in 2023 (DKK 11,900 in 2022), you may deduct the rest of the standard deduction from you income made via private rental before you calculate your taxable income.

Example: Renting out your home privately and via a platform - when the income is less than DKK 11,900

Naja has rented out her home privately and via a platform. Her income via the platform is DKK 8,000 and the income from the private rental is DKK 12,000.

When she deducts the standard deduction of DKK 11,900 in 2022 from her income via the platform, there is DKK 3,900 left of the standard deduction (what we call an unused standard deduction). She deducts the unused standard deduction from the income she has earned from renting out her home privately.

In this example, Naja has to pay tax on DK 5,060. She enters this amount (her taxable income) in her tax assessment notice in box 37.

Example: Renting out both via a platform and privately - when the income exceeds DKK 11,900

Naja has rented out her home via a platform and also privately. Her income via the platform is DKK 14,000 and the income from the private rental is DKK 12,000.

* The standard deduction can never be less than DKK 0.

In this example, Naja has to pay tax on DKK 7,200. She enters this amount (her taxable income) in her tax assessment notice in box 37.

When you rent out your home for 4 months or more and apply method 2, your standard deduction primarily depends on whether you own your home, rent it or you are a housing cooperative member.

It also matters whether you have lived in the home all or part of the year and whether you own the home with others or share the rent with others.

Read more under If you share the rent or co-own the home with others. 

When you own your home: 

1. You have to use your rental income and your property value from the year before you rented out your home and your rental income:
   You find the property value by logging on to E-tax (TastSelv) and then you fint the PDF version of your most recent tax assessment notice or you can look up the property value at ois.dk.
   
   The rental income includes payment for, water, electricity, heat and internet, for example.
   
   
2. Now, you have to calculate your standard deduction.
   You do so by taking 1 1/3 % of your property value (for example, DKK 2,000,000 kr. /100 x 1 1/3). However, your standard deduction will always be minimum DKK 24,000.
   
   
3. Then deduct your standard deduction from your income.
4. Now, you have the amount you have to pay tax on (your taxable income).
5. Enter your taxable income in your tax assessment notice in box 37.
   You pay tax throughout the year by entering the income in your preliminary income assessment in field 218.

When you have a cooperative home or rent your home:

1. You need your rental income and your rent/cooperative housing fee.
   The rental income includes payment for, water, electricity, heat and internet, for example.
   
   
2. Now, you have to calculate your standard deduction.
   You do so by taking 2/3 of your own annual property tax/cooperative housing fee (for example, 2/3 of DKK 25,000).
   
   
3. Then deduct your standard deduction from your income.
4. Now, you have the amount you have to pay tax on (your taxable income).
5. Enter your taxable income in your tax assessment notice in box 20.
   You pay tax throughout the year by entering the income in your preliminary income assessment in field 250.

This means that you cannot deduct expenses such as electricity, water and heating or your land tax (property tax). And you are not entitled to property tax relief when you use your standard deduction.

If you share the rent or co-own the home with others, you are generally only entitled to a deduction corresponding to your part of the rent or share of ownership.

However, sometimes there may be more than one standard deduction per all-year home. 

When you co-own the home with others

If you co-own the home with your spouse or partner, for example, you share the standard deduction between you. 

If you own 50% of the home, you are entitled to 50% of the standard deduction.

When you live with other people and you share the rent between you

If you share the rent with other people, you also share the standard deduction between you. 

If, for example, you pay 25% of the rent, you are entitled to 25% of the standard deduction.

When you live with other people and you each have your own rent 

If you live with others and you are each paying your own rent to the landlord, each of you are entitled to a standard deduction which you do not have to share with the others. 

As a result, you are entitled to the entire standard deduction.

Example: Owner renting out a room for the year

Jens has an owner-occupied home and rents out a room for 12 months. In his tax assessment notice he can see that the property value is DKK 1,500,000. The standard deduction is 1 1/3 of the property value meaning: DKK 1,500,000/100 x 1 1/3 = DKK 20,000. As the standard deduction is at least DKK 24,000, Jens’ standard deduction is in this case DKK 24,000.

In this example, Jens has to pay tax on DKK 15,000. He enters this amount (his taxable income) in his tax assessment notice in box 37.-

Example: Cooperative home-owner rents out a room for the year

Hanna has a cooperative home and has rented out a room for 12 months. Her annual cooperative housing fee is DKK 45,000. Her standard deduction is 2/3 of the total annual cooperative housing fee meaning DKK 30,000. (2/3 of DKK 45,000).

In this example, Hanna has to pay tax on DKK 8,600. She enters this amount (her taxable income) in her tax assessment notice in box 20.

If you choose to apply the accounting deduction, you will have to pay tax on your rental income minus actual expenses.

When you own your home, the income is considered income from capital. As a result, you have to enter your income minus your expenses in your tax assessment notice in box 37 and in your preliminary income assessment in field 218.

You should keep a record of rental income and expenses to show us if we ask for it. You must keep the receipts for items you are deducting.

Deductible expenses:

• Electricity, water, heating, for example.
• Maintenance costs and write-off of fittings and furniture (except domestic appliances).
• Expenses related to rental such as advertising.

You cannot deduct expenses for maintenance of the actual property or regular costs including rubbish collection, sweeping of chimney, insurance.

Property value tax relief

You are liable to pay property value tax on the part of the property you rent out. You obtain the relief by entering the rental period and how much of the property you rent out in your tax assessment notice.

Land tax deduction (property tax for your local municipality)

You can deduct a proportionate part of your land tax as an expense if you rent out at least 10% of your home.

If, for example, you rent out 15% of your home, you deduct 15% of your land tax in the period you rent out part of your home.

You should enter DKK 12,000 in box 37 of your tax assessment notice and in field 218 of your preliminary income assessment. You also need to enter how much of your property you rent out and for how long.

Your total deductions cannot exceed your rental income.

If you choose to apply the accounting deduction, you will have to pay tax on your rental income minus actual expenses.

When you rent out your home or have a cooperative home, the income is considered personal income. As a result, you have to enter your income minus your expenses in your tax assessment notice in box 20 and in your preliminary income assessment in field 250.

You should keep a record of rental income and expenses to show us if we ask for it. You must keep the receipts for items you are deducting.

Deductible expenses:

• Electricity, water, heating, for example.
• Maintenance costs and write-off of fittings and furniture (except domestic appliances).
• Expenses related to the rental, such as advertising and rent

You cannot deduct expenses for maintenance of the actual property or regular costs including rubbish collection, sweeping of chimney, insurance.

Example: Accounting deduction when you rent out your home or own a cooperative home

Søren’s monthly rent is DKK 5,000 and he rents out 10% of his home for 3 months.

The rent expense is: 3 months x DKK 5,000 x 10% = DKK 1,500 

During the same period, he pays DKK 1,500 for electricity, water and heating:

The expense is: 3 months x DKK 1,5000 x 10% = DKK 450

As a result, Søren has to enter DKK 3,040 in box 20 of his tax assessment notice and in field 250 of his preliminary income assessment.

The total deduction amount cannot exceed the rental income.