Do you want to rent or own your home?

One of the major questions when deciding on a home in Denmark is whether to own or rent or opt for co-operative housing. Read more in the following about the advantages and disadvantages of the various types of home.

  • 1. Owner-occupied home   

    1. Owner-occupied home   

    Around half of all Danish people live in an owner-occupied home, and it is thus the most popular type of home in Denmark.

    Advantages of living in an owner-occupied home

    • When you own your own home, you make all the decisions. For example, in what colours you want to paint it and whether you need a new kitchen. This is a freedom which many people value highly.

    • You may use your home to save up. Most people have to take out a mortgage loan and perhaps also a bank loan to buy a home. But if you pay instalments on the loans – and the value of your home increases or stays the same – you will, over time, build up equity, which you can use to take out an inexpensive loan or realise as profit if you sell the property.

    • The value of your home may increase over time. This may contribute to increasing your equity, and you can later sell the property at a profit.

    Disadvantages of living in an owner-occupied home

    • You must be able to pay part of the purchase price yourself when you buy an owner-occupied home – how much you have to pay varies. So you may need to save up a substantial amount before you buy a home.

    • You must pay tax on your home – both property value tax and municipal property tax.

    • The value of an owner-occupied home may decrease. If the value of your home decreases so much that the debt exceeds its value, you are what is known as ‘technically insolvent’. This may be a problem in particular if you are to sell your home, but cannot do so without incurring a loss.

    • There are costs associated with buying and selling an owner-occupied home. The general recommendation is therefore that you should plan to live in your home for a few years if you choose to buy it.

    Read more about the process of buying a home

    We will be happy to help you with any home-related questions - big or small. 

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    - or call us on +45 70 25 11 22

  • 2. Co-operative housing

    2. Co-operative housing

    A co-operative housing unit differs from an owner-occupied home in several ways. In a co-operative housing society, the co-operative members own the property jointly, while the owners in an owners’ association each own their homes and have their own loans. As a co-operative member, you buy only the right to use the home, but you also acquire a share of the society’s assets and liabilities.

    Advantages of living in a co-operative housing unit

    • The price of a co-operative housing unit is typically lower than that of a similar owner-occupied home because you do not buy the unit, but a share in the co-operative housing society with a right to use the home.

    • When you buy a co-operative housing unit, you become part of a community in the co-operative housing society in which the members own and run the property together.

    • You need to borrow money only for your unit, whereas the co-operative housing society is liable for the other loans in the property.

    Disadvantages of living in a co-operative housing unit

    • You cannot take out a mortgage loan to buy a co-operative housing unit as you can for an owner-occupied home. Instead, you must take out an Andelsboliglån (co-operative housing loan) with your bank, which typically has a slightly higher interest rate.

    • The co-operative members decide jointly how the society is to be run. This includes how the funds of the society are to be used and which loans the society is to raise. You have a say in the decisions of course, but you also risk being outvoted in matters which may impact your financial situation. This also applies in owners’ associations, but it is of particular importance in co-operative housing societies, which more often have large joint loans.

    • The value of a co-operative housing society may be assessed in various ways – and a change in the valuation may affect the price significantly. The actual value of a co-operative housing unit is therefore less transparent.

    Read more about co-operative housing loans

    home Køberrådgivning
    Our estate agency partner ‘home’ offers ‘home Køberrådgivning’ (home Buyer Advisory Services). An adviser can help you review all documents, assess the purchase price and negotiate the price on your behalf.

  • 3. Rented accomodation

    3. Rented accomodation

    Many newcomers to Denmark start out living in rented accommodation. This provides flexibility and time to examine your options before deciding to buy a home. Rents vary greatly in Denmark.

    Advantages of living in rented accommodation

    • As a tenant, you are in a fairly flexible position. You can easily move out again, because you do not have to sell your home, just give a certain notice. This is an advantage especially if you do not intend to stay for more than a couple of years or just want to be able to move on quickly.

    • You and your landlord often share the responsibility for maintaining the home – but this depends completely on the terms of your tenancy agreement. Always remember to read the tenancy agreement carefully before signing.

    • You avoid taking out a loan to buy a home. 

    Disadvantages of living in rented accommodation

    • The main disadvantage is that you do not use the home to save up, as you would if you make repayments on a loan for an owner-occupied home. This means that rented accommodation may be an expensive solution in the long term, even if the monthly rent is lower than the payment on a similar owner-occupied home.

    • As a tenant, you cannot paint or refurbish the premises as you like. You must obtain permission from the landlord. The same applies if you want to sublet your home for a period.

    You do not need a home loan to live in rented accommodation, but, as a general rule, you must pay a deposit amounting to three months’ rent and possibly also three months’ rent in advance. This may add up to a large amount, which you cannot be sure of getting back when you move out, for example if you have damaged something.

  • 4. House or flat?

    4. House or flat?

    This is mostly about whether you want a garden or thrive best living in the city centre or in a quieter residential area with houses. But there are also financial aspects worth considering when choosing between a house and a flat.

    As a house owner, you have to pay the bill yourself if the house needs a new roof. This is not the case in an owner-occupied flat or a co-operative housing unit. In a residential area with houses, there is more space for children and pets, but it is also often further away from shopping, cultural activities and work, which may entail higher transport costs. 

    A house may be the right choice anyway, but remember to include all expenses and other aspects, so that your finances or practical circumstances, such as long transport times, do not prevent you from leading the day-to-day life that you want.