Municipal property tax has been frozen since 2018

Municipal property tax, also called land tax, is the amount paid to the municipality based solely on the value of a property.

But what is the frozen property tax that you can see on your property tax bill?

First, let’s set things straight – you should not confuse the scheme to freeze municipal property taxes, which has existed since 2018, with the loans offered to pensioners for payment of property tax.

In 2018, all property owners were registered in an obligatory “freeze scheme” in regard to municipal property tax. As a homeowner, you therefore have the opportunity to have part of your property tax frozen. In short, this means that your municipality freezes the annual increase in the property tax, so that you avoid having to pay the increase in the property tax right away. In other words, an interest-free, zero-fees loan is set up, that grows in line with increases in the property tax and must be paid back on the date when you decide to either release the frozen property taxes or sell your house or apartment. In this case, the municipality will send a statement together with a bill.

Note that the municipality only freezes property tax increases over DKK 200 per property per owner.

Is it possible to opt out of the frozen property tax scheme?

If you, as a homeowner, do not wish to freeze the annual increases in your municipal property taxes, you can opt out of the scheme. Naturally, this means that you must pay both the frozen property tax that has been accumulating since 2018 as well as any future increases in the property tax.

Once you decide to release the frozen property taxes, you cannot later regret the decision and ask for your money back. It is possible, however, to re-register with the scheme so that any future increases in the property tax are frozen from that date on.

Note that from 2024, the freeze on property tax will apply to both the municipal property tax and the property value tax.

If you don’t do anything

If you don’t opt out of the scheme, the increases in your property tax will continue to be frozen as before, and you will therefore be required to pay the frozen property taxes on the date when you sell your house.

What you should be aware of

In connection with the new property tax system that is expected to enter into force in 2024, interest will be charged on the total amount of frozen property taxes at a fixed annual market rate.

If you would like to read more about the freeze on municipal property tax, you can do so at skat.dk.