Reportability's guide to your preliminary income assessment
Before a financial year begins (usually January 1st), it is important that you have a handle on your preliminary income assessment. This ensures that you pay the correct tax rate and, not least, that you avoid the risk of a tax bill the following year.
The tax return (oplysningsskema)
You may have heard that you need to fill out a tax return when renting out a property. This is what used to be called a "selvangivelse." However, this only applies once the year has ended. Therefore, start as you usually would.
If you want to read more about the tax return for residential landlords, you can read more in this blog post.
Business tax schemes
The Personal Tax Act is the simplest tax scheme and the one selected automatically on the Danish Tax Agency's (Skats) self-service portal.
It is the least complicated tax scheme and therefore the "easiest" to use. However, it is also the one from which you can derive the fewest benefits. If you own a cooperative housing unit (andelsbolig), you can only choose the Personal Tax Act (PSL) as your tax scheme.
If you have low or no debt on your property, then the capital return scheme is the most advantageous tax scheme for you. Here, you are compensated in relation to the taxation of interest income you would have had at your bank, which is typically lower than the taxation of the return on your property rental. The capital return rate is set every year, and the higher it is, the better. The capital return rate is 3% (2025), but in previous years it has been 0-2%.
If, on the other hand, you have high debt on your rental property, then Corporate Tax Scheme a better choice. For most people, this tax scheme is the most advantageous because you are taxed as a rental business (22% corporate tax). It is required that you have a separate bank account. At the same time, you get a higher deduction value for your interest expenses.
Should you use the Capital Return Scheme (KAO) or the Corporate Tax Scheme (VSO)?
A rule of thumb when choosing a tax scheme is: If the interest costs for the property loan are greater than the capital return calculated in KAO, VSO is the most advantageous.
Your choice of tax scheme only becomes final when you file your annual tax return. You can therefore change it and get the right benefits if you don't choose the right one when you prepare your preliminary income assessment.
At Reportability, you can choose a Tax package with accountant consultation, which, among other things, gives you access to an annual review of your figures and a professional assessment of your tax scheme.
Property value tax
If you own a property, you pay property value tax. If you rent out your property, you can avoid paying property value tax during the rental period by stating the number of rental days in box 207 on your tax return. You will find box 207 under Property Information for the property in question.
On the preliminary income assessment, the property value tax is adjusted in field 736, where you can enter the number of expected rental days.
