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When is it possible to acquire real estate in Denmark?

There is no need to worry about whether the buyer of real estate is actually capable of acquiring said real estate in Denmark in most transactions, since it is not a problem if the buyer has lived in Denmark their whole life. However, the question of ability to acquire arises when the buyer does not reside in Denmark, or if the buyer has been abroad for extended periods of time. In this article, we give an overview of what criteria that needs to be met, in order to acquire real estate in Denmark.

Denmark as the place of residence

Under Danish law exists a principle of freedom to enter agreements, meaning anyone can make an agreement or deal with anyone, including agreements about acquisition of real estate. However, the Danish parliament passed a law in 1959 on acquisition of real estate[1] (henceforth “the acquisition law”) which limits foreign persons access to acquisition of real estate in Denmark. It is the place of residence of the buyer – not their citizenship – that determines if they can acquire real estate in Denmark.

Persons, who have or have had Denmark as their place of residency for 5 years can – disregarding citizenship – acquire real estate. It is possible to fulfil the criterion (and thereby have Denmark as the place of residency) in the 2 following ways:
  1. You have the right to acquire real estate in Denmark if you have stayed in the country for a period of 5 years in total. The 5 years of residency in Denmark does not have to be unbroken, meaning that the requirement can be fulfilled by multiple shorter periods, where the person has stayed in Denmark. If the person has had Denmark as their place of residency (through 1 or multiple periods), they keep their right to acquire real estate in Denmark, regardless of any later residency outside of Denmark.
  2. Even if their criteria of 5 years of residency is not met, it is still possible to have the right to acquire real estate in Denmark. However, this presumes that the person is able make it probable, that they have taken permanent stay in Denmark. The criterion is not met, if the person has stayed in Denmark for an extended period in relation to studying, asylum or a work posting, as this would be considered an interim stay.
     

Permission from the ministry of Justice

The buyers are only able to acquire real estate in Denmark with permission from the ministry of Justice[2] if they do not have permanent and lasting residency in Denmark and have not had it previously for a period of 5 years. However, this permission is not needed if the real estate is acquired through inheritance, acquisition through undivided estate in a marriage, by sharing of property in a divorce or as a gift from close relatives.[3]

They buyers must apply for permission to acquire from the ministry of Justice up to 6 months before the date of transfer of the real estate.[4]

The ministry of Justice’s decision on permission for acquisition is made through a specific assessment of each case, where it is assessed if the buyers will take permanent stay in Denmark.

EU-citizens

As an EU-member state, Denmark is subject to the EU principles of free movement of labour. Therefore, the Danish parliament has passed a number of “exceptions to the rule” for the acquisition law’s criterion of place of residency, cf. above, meaning that foreign persons can acquire real estate under certain conditions.

The rules have been adopted in a statutory declaration[5] (“Bekendtgørelse”), asserting that the following persons and companies can acquire real estate in Denmark:
  1. Citizens of EU-member states, who earn a wage in Denmark
  2. Citizens of EEA-member states[6], who earn a wage in Denmark
  3. Citizens of EU or EEA-member states, who have established or want to establish a company in Denmark
  4. Citizens of EU or EEA-member states, who have created or want to create agencies or branches in Denmark, or who wants to provide services in Denmark
  5. Companies in EU or EEA-member states, who have created or want to create agencies or branches in Denmark, or who wants to provide services in Denmark
  6. Citizens of EU/EEA, who have an EU/EEA residency permit

If you have a right to acquire real estate on the basis of the above, you do not need a permit from the ministry of Justice. The buyers must declare that the property shall serve as year-round housing or is necessary for independent business operation[7], when registrating the deed of the property.

Summer houses

The extended access to acquisition of real estate in Denmark for EU and EEA citizens does not apply on acquisition of summer houses. In this case the rules of the acquisition law are applied, which means that the buyer needs to have a permanent and lasting residence in Denmark, or to have previously resided in the country for a period adding up to 5 years.

The acquisition of real estate requires a permission from the Danish Civil Authority[8], if the buyer does not meet the requirements of residency that the acquisition law puts forward – this permit is only given to those who have an especially strong attachment t Denmark. In this assessment, emphasis can be put on the buyer’s family ties to Denmark, the buyer’s linguistic or cultural ties to Denmark, and the buyer’s attachment to the specific real estate that they want to buy.

The possibility for foreigners to buy a summerhouse in Denmark is therefore severely limited, compared to the possibility of acquiring a year-round residence.

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[1] “Lovbekendtgørelse 2014-03-21 nr. 265” on acquisition of real estate

[2]cf. The acquisition law art. 1, 1

[3] By” close relatives” under art. 2 is meant “relatives in a straight up – and down descending line”.

[4] cf. The acquisition law art. 3

[5]”Bekendtgørelse 1995-09-18 nr. 764” on acquisition of real estate concerning certain EU-citizens and EU-companies, as well as persons and companies from countries who have entered the Agreement on the European Economic Area (henceforth ”the statutory declaration”.

[6] Norway, Switzerland and Luxembourg

[7] cf. The statutory declaration art. 3, 4

[8] ”Civilstyrelsen”

Date: 16.09.2022

Authors: Line Stecher and Asger Søderberg
     

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