If significant changes occur, especially regarding your income or deductions (for example, if you have moved and your commuting allowance has changed), it is highly recommended to update your preliminary income assessment as soon as possible. Otherwise, you risk having to pay a large amount back in taxes.
Of course, it could also mean that you get money back instead. Most people don't mind that.
Adjust your preliminary income assessment and avoid surprises
If you are a new landlord, or if there have been changes to your rental activity or loans, there is good reason to make as accurate an estimate as possible of what you expect to earn. If you do not adjust your 2026 preliminary income assessment, you will have had a higher income than expected when the tax year is settled, and you will naturally have to pay tax on that income = a tax bill.
The Danish Tax Agency opens the preliminary income assessment in mid-November, but it is a good idea to adjust it continuously as changes occur.
Property rental and tax
Dealing with taxes, deductions, tax schemes, preliminary income assessments, and tax returns can be a bit of a jungle.
The Danish Tax Agency has three ways to collect tax on a profit from property rental:
- By lowering your personal deduction
- By increasing your tax rate
- By issuing on-account tax payments.
They will always start by lowering your deduction, and it is precisely this issue of deductions that can surprise new landlords, as it can take a significant bite out of your profit. If your property rental results in a loss for a year, you receive a deduction for this in your personal income.
How is tax normally collected?
Tax is collected on an ongoing basis using your tax card. Your employer pays your salary every month, and your tax card is applied then. The higher your deduction and the lower your tax rate, the less you pay in tax. The lower your deduction and the higher your tax rate, the more you pay in tax.
How do I pay tax on my property rental?
At Skat.dk you can update your preliminary income assessment for 2026, which will provide you with a new tax card. Your preliminary income assessment acts as a tax budget, showing what the tax authorities expect you to earn and what deductions you have for the coming year. However, to ensure you pay the correct amount of tax, you need to update it regularly as changes occur in your income and rental activities.
If you expect a profit from your property rental, your tax card will be adjusted, resulting in a smaller deduction and a higher tax rate. You will then pay tax at a new rate each time you receive your salary from your employer. You should also update your information if there are changes to your loan or interest rates.
When is the tax collected?
Your new tax card, including adjustments from your property rental, is automatically used by your employer. This means you pay tax on your rental income every month as soon as you update your preliminary income assessment. The earlier in the year you make the change, the smaller the monthly adjustment will be.
At the end of the year, you must calculate the actual figures and complete your tax return. If you have paid too much tax during the year (e.g., if your deduction was reduced more than necessary), you will, of course, receive a tax refund.
What might come as a surprise?
Many property owners are surprised to find that their personal deduction suddenly decreases when they fill out their preliminary income assessment. Wasn't the point to make a small profit? To have more money in your pocket? Now, it looks like you have less on your payslip!
If it turns out that you are making a profit on your property rental and you update your preliminary income assessment, the tax authorities will automatically reduce your personal deduction slightly. This ensures that you pay the tax on your profit incrementally throughout the year and do not receive a tax bill at the end of the year.
So, while your payslip may show a slightly lower amount than usual, you also have the rental income, which should ideally offset this or provide you with a profit.
Conversely, a year with an expected loss on your property rental will give you a slightly higher deduction. While that might feel good at first glance, it ultimately means that your business is operating at a loss.
Help with your preliminary income assessment and tax return
To ensure you don't pay too much tax, it is important to keep track of both your income and expenses. When preparing your preliminary income assessment, you will need to estimate both. This can be tricky in your first year, but you can get help by using tools like Reportability, which guides you with relevant questions and calculations.
You can always try our tool for free and see how easily you can manage your preliminary income assessment and tax return. If you have any questions along the way, we are ready in the chat to help you move forward quickly and securely.
