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PROPERTY

What can you do if your home in Denmark has been given a ‘skewed’ valuation?

Some 70,000 homeowners in Denmark have received valuations on their homes for tax purposes, which could include significant errors, according to media reports.

Published: 15 September 2023 15:05 CEST
What can you do if your home in Denmark has been given a 'skewed' valuation?
New property tax rules will apply in Denmark from next year. File photo: Ida Marie Odgaard/Ritzau Scanpix

Preliminary property valuations for forthcoming new tax rules, which take effect in 2024, were released earlier this week.

Homeowners have therefore been able to check the valuations of their homes, conducted by the Danish Property Assessment Agency (Vurderingsstyrelsen).

However, the published valuations – which consist of the property value (ejendomsværd) and land value (grundværdi) contain clear errors in up to 70,000 cases, according to reports by Danish media including broadcaster DR.

That is because some houses have been allocated a land value higher than the property value. This is impossible since the overall value of the property should be a combination of the values of the land and the building. A land value higher than the property value would therefore give the house a negative value.

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“We understand the confusion among homeowners over the examples of very skewed valuations that have been reported in the media. We have also been contacted by many frustrated members of the public,” Property Assessment Agency director Poul Taankvist said in a press statement.

The agency said it would review all valuations in the coming weeks before getting back to affected homeowners.

While incorrect preliminary valuations will not result in higher property tax bills – the new tax rules provide for deductions to be given to homeowners whose properties taxes would otherwise go up as a result of new valuations – they could potentially create complications when selling the house.

Although the Property Assessment Agency has said it will review cases, concerned homeowners have several steps of recourse available if they have valuations which they consider to be incorrect, DR writes.

These include contacting the Property Assessment Agency to request a reassessment of the valuation, especially if there is a 20 percent deviation from comparable properties; asking the agency to check it is based on correct data; sending an appeal to the Danish Data Protection Agency (Datatilsynet); and finally taking the Property Assessment Agency to court.

According to DR’s analysis of 1.6 million preliminary valuations, some 80,000 have land values higher than their property values. The average difference is some 1.3 million kroner.

The Property Assessment Agency has however previously stated that, in some cases, the land valuation might by higher than the value of the property, for example if two new properties could be built on the land in place of the existing one.

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ECONOMY

Explained: Why Denmark’s economy is looking in such extremely good shape

Denmark's economy is growing faster than the government expected, inflation is falling faster, and employment is holding up better. We explain why the new economic forecast shows Denmark has achieved the softest of soft landings.

Published: 16 May 2024 15:41 CEST
Explained: Why Denmark's economy is looking in such extremely good shape

 “When I stood here a year ago and presented my first financial statement, it was with a message that the Danish economy was heading for a soft landing. We have since been strengthened in that assessment,” Stephanie Lose, Denmark’s economy minister, said at a press conference announcing the government’s Økonomisk Redegørelse, or financial statement, for May. 

In the press statement, she said, “optimism is returning to the Danish economy”, with the economy likely to improve further in the coming year.

“We have carried out reforms that make Denmark richer and help to secure the necessary workforce for Danish companies,” she said. 

How has the government changed its growth forecasts? 

The government has increased its expectation for Denmark’s growth rate since its last statement in December, with it now expecting 2.7 percent growth in 2024, up from the1.4 percent it expected for the year in December. 

It has also upgraded its expectations for 2025, predicting growth of 1.8 percent compared to the 1 percent it expected back in December. 

Lose said that the pharmaceutical company Novo Nordisk, which is expanding rapidly as a result of the success of its weight-loss drugs Ozempic and Wegovy, had driven much of Denmark’s recent growth, with the reopening of Denmark’s gas field, the Tyra field, would start to contribute to growth soon.

“In the past two years, the pharmaceutical industry in particular has driven growth in the Danish economy, while there has been stagnation or decline in large parts of the rest of the economy,” she said. “In the coming years, other industries again look set to contribute to growth. Added to this is the reopening of the Tyra field in the North Sea, which also contributes to growth in GDP.” 

What does the government expect to happen to inflation? 

Denmark’s inflation rate fell rapidly from a peak of over 10 percent in October 2022 to below 2 percent in September 2023, where it has stayed ever since. But Lose said she expected the rate to edge up over the coming years. 

“Inflation has fallen quickly and faster than expected,” Lose said. “In the new forecast, we expect inflation to rise in the coming months, as the prices of services and energy pull in the direction of slightly higher inflation.” 

What does the government expect to happen to employment? 

Thanks mainly to Novo Nordisk increasing staffing to manage the success of its new drugs, and the bounce back from the pandemic, employment has also held up better than expected.

Employment soared by some 160,000 people between 2021 and 2023, and the government now expects the number of employed people to grow by a further 13,000 in 2024 but to then fall by 18,000 in 2025. 

“Employment has long been at a sky-high level, so it is estimated that we will see some adjustment. But we do not expect an extensive setback, because the Danish economy stands on a rock-solid foundation,” Lose said.

What does the government expect to happen to housing prices? 

The government has significantly upgraded its expectations of what will happen to the price of domestic property this year. It now expects prices to increase by an average of 3.2 percent in 2024 and 3 percent in 2025, a rise of two percentage points on the 1.2 percent rise for 2024 it expected when it made its last forecast in December. 

This is due to the continued strong labour market, which has seen rising incomes and wage increases in Denmark as a result of new collective agreements, at the same time as Denmarks Nationalbank is expected to cut interest rates. 

This rise follows two consecutive years of falling real house prices in 2022 and 2023. 

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