Property purchase in Denmark

In this article, we will take a closer look at the legal basis for foreigners purchasing real estate in Denmark, as well as the exceptions to the general rule for the purchase of real estate in Denmark by foreigners and the consequences of evading the law.

The purchase of real estate in Denmark by foreigners is regulated by the Act on Acquisition of Real Property. The general rule is that foreigners who are not resident in Denmark, and who have not previously lived in Denmark for a total of five years, must apply for permission to acquire real estate from the Department of Civil Affairs, cf. § 1(1) under the terms of the Act on Acquisition of Real Property.

A previous period of residence does not have to have been continuous. It may have been, for instance, a residence period of two years combined with a later period of three years. However, temporary residence, such as vacations, study stays, etc. will generally not be included in this period.

If you look into § 1(3) of the Act on Acquisition of Real Property as well as government order no. 764 of September 18, 1995, on the acquisition of real estate, there are certain exceptions (special rules) to the general rule; for instance, if you are an EU/EEA citizen. Nationals of these countries may acquire real estate in Denmark without obtaining permission from the Department of Civil Affairs if the buyer meets a number of criteria. Among these, the buyer must purchase the property with the intent of using it as a year-round residence, and the buyer must be employed and salaried in Denmark or in another EU/EEA country, or the buyer must have an EU/EEA residence permit, or the buyer must have established or plan to establish self-employment in the country, or the buyer must have or plan to establish an agency/branch or to provide or receive services in the country, or the buyer must has sufficient funds to support the family.

In the above cases, all that is required is to insert a declaration in the deed.

In addition, it is possible for foreigners to purchase real estate in Denmark without permission from the Department of Civil Affairs in the event of inheritance, retaining undivided possession of an estate, division of joint estates, as well as acquisition by gift to relatives in ascending and descending line, cf. § 2 of the Act on Acquisition of Real Property. However, in the case of partial inheritance or gift and partial self-payment, permission from the Department Civil Affairs is still required.

EU countries:

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the Czech Republic.

EEA countries:

Norway, Iceland, Switzerland, and Liechtenstein.

Greenland and the Faroe Islands

Greenland and the Faroe Islands are part of the Kingdom of Denmark and the rules of the Act on Acquisition of Real Property apply. People who have been resident in either the Faroe Islands or Greenland for at least five years can therefore acquire real estate in (the rest of) Denmark without obtaining permission from the Department of Civil Affairs.

In the above cases, a declaration will have to be inserted in the deed.

In the event of property purchased without permission from the Department of Civil Affairs, the department will issue an order to sell the property within a fixed period of at least six months and no more than one year, cf. § 8 of the Act on Acquisition of Real Property. The Department of Civil Affairs can exercise the same right if there is a conditional or time-limited permit, cf. § 5 of the Act on Acquisition of Real Property, and the condition is no longer met. For instance, if the Department Civil Affairs has made it a condition that the buyer must submit a copy of an extended residence permit, and the buyer fails to meet this condition.

If it is stated as a condition in the permit that the property is to be used for year-round residence, you are generally not allowed to move without selling the property. In this case, the Department of Civil Affairs will order you to sell the property within six months. If you choose not to comply with this order, you will be penalized with a fine. An exception to this rule applies if you have been posted or stationed and apply for permission to keep the property during your posting abroad.

If you have lived in Denmark for more than five years when you decide to move out of the property, you are not obliged to sell or transfer the property.

The short answer is no. The Department of Civil Affairs only issues authorizations for the acquisition of specific properties. You must find the specific property you wish to buy before submitting the application to the Department of Civil Affairs.

When buying a secondary residence (holiday home/ summer house), it is possible to obtain an advance commitment from the Department of Civil Affairs if the department assesses that you have sufficiently strong ties to the country to obtain permission to buy a holiday home. The advance commitment is valid for three years. When you find the holiday home you wish to buy, you must inform the Department of Civil Affairs, which will then prepare the final permit for the registration of the deed.

The processing time for a permit for the acquisition of a year-round residence is around four weeks, while the processing time for a permit for the acquisition of a secondary residence (holiday home) is around eight to ten weeks. Note that the processing time may vary depending on the departments caseload.

If you want to read more about acquiring a holiday home/summer house (secondary residence) in Denmark, click here.