Although you are not a Danish citizen, you may purchase a house or a flat in Denmark if:
- You reside in Denmark or has resided here for a total period of at least five years
- You are an EU/EEA Citizen and will be in paid work or will carry on business in Denmark (It is a condition that the property is to be used as an all-year dwelling or is required for the buyer to be able to carry on business)
These provisions also apply to you if you are a Danish citizen and have not previously resided in Denmark for a total period of at least five years.
If you do not meet the requirements, you may apply to the Danish Ministry of Justice for permission to purchase a house or a flat. When considering your application, the Ministry of Justice will attach significance to any significant other ties with Denmark, which you may already have.
How do you pay for the real estate?
In Denmark, most people finance their real estate purchase by taking out a mortgage. A mortgage is a loan with a long duration, typically 20 to 30 years, and usually carries a lower interest rate than an ordinary bank loan.
You will be able to mortgage up to 80% of the purchase price. Of the remaining 20% you must contribute a down payment equivalent to 5% of the purchase price. Usually, if further financing is required, a bank loan is taken out to cover the remaining 15% of the purchase price.
Whether you borrow money from your bank or a mortgage-credit institution, you must provide security for the borrowing in your house or flat. Until the loan or mortgage is settled, the bank or mortgage-credit institution holds a charge over the property – which means that the property is used as security for the money borrowed.
What happens when there are latent defects in a property?
When you buy a property, the seller will usually provide you with a copy of a home buyer’s report and an electrical surveyor’s report and will offer to pay half of a home warranty insurance premium. At the same time, you will also receive an offer for a home warranty insurance policy.
Supplying you with the above documentation basically relieves the seller of any liability in respect of latent defects in the property.
The purchaser has the option of taking out a home warranty insurance policy. This will cover any expenses you may incur in rectifying any defects, which come to your attention after you have taken possession of your new property.
How is your title in the property registered?
Your title in your new home will need to be registered in the so-called Land Register. You will be registered as the owner of the house or flat. In addition, the mortgage or loan which you may have taken out to finance the purchase of the property, or to finance any later remodelling, will be registered.
You will be charged a fee for registering title and for registering any lender or lenders and their respective charges over the property.
For more information on buying a home in Denmark, please refer to the website of the Danish Ministry of Justice.
Who are you going to call?
Most Danes find buying a property in Denmark a daunting prospect. The legal documentation alone typically is of 160 to 220 pages per estate. For this reason, you should consider contacting a lawyer who specialises in conveyancing, i.e. the purchase and sale of real estate, and may provide you with assistance throughout the process. Feel free to contact Advodan’s experienced real estate lawyers.
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