When you rent out a property, you can generally claim deductions for expenses that are necessary to manage the rental.

This means that you do not pay tax on the entire rental income, but rather on the profit after deductible expenses have been subtracted.

Which expenses can you typically deduct?

As a landlord, you can, among other things, claim deductions for:

• interest on loans
• property taxes
• insurance
• water, sewage, and waste disposal fees
• electricity, water, and heating, if you pay for them
• maintenance
• advertising

What can you not deduct?

Not all expenses are tax-deductible in your ongoing tax assessment.

This includes, among other things:

• loan repayments
• improvements that increase the value of the property
• private expenses that do not relate to the rental

Improvements may instead be relevant when you sell the property, as they can be included in the calculation of the taxable capital gain.

Remember the difference between maintenance and improvements

One of the most common mistakes is confusing maintenance with improvements.

As a general rule:

• Maintenance can usually be deducted in the year the expense is incurred.
• Improvements generally only provide tax value upon the future sale of the property.

If you are in doubt about how a specific expense should be handled, it is a good idea to look into the rules before filing your taxes.

Why are deductions important?

Deductions reduce the income you are taxed on.

The better your overview of your deductible expenses, the more accurate your tax calculation will be. It is also important to keep documentation and receipts in case the Danish Tax Agency later asks to see the basis for your deductions.

Get help finding all your deductions

Many landlords find it difficult to keep track of which expenses are deductible and how they should be reported.

Reportability is designed for landlords and helps you:

• calculate the tax on your rental income
• register relevant deductions
• keep track of income and expenses
• show how information should be reported to the Danish Tax Agency

This makes it easier to claim all the deductions you are entitled to without having to master every detail yourself.

In short

In principle, you can deduct expenses necessary to operate your rental property, such as interest, maintenance, insurance, and various operating costs.

Conversely, loan repayments and improvements cannot be deducted in your ongoing tax assessment. Therefore, it is important to know the difference between the various types of expenses and to register them correctly.

‍