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MONEY

Boligstøtte: Who can claim Denmark’s national rent subsidy?

Residents of Denmark can in some cases apply for ‘boligstøtte’ (“housing support”), a reduction on their monthly rent.

An interior of a Danish apartment
An interior of a Danish apartment. Tenants can receive rent subsidies if their income falls under a certain threshold. Photo: Emil Helms/Ritzau Scanpix

What is boligstøtte? 

Boligstøtte is a tax-free sum which people who live in rented housing can – in some cases – qualify for. It provides a subsidy to rent.

The subsidy is available to anyone who rents their home, provided the home meets certain criteria and the household income is under a certain level.

For example, your rental home must have its own kitchen (which would rule out student housing with shared kitchens, termed kollegier in Danish) and you must live permanently in the property.

Homeowners can also be entitled to apply for boligstøtte under certain circumstances. In such cases, the boligstøtte is a loan and not a subsidy, however.

The size of the subsidy – the amount of money you receive each month – depends on the overall income of the household (the total of the incomes of all wage earners at the address), the number of children and adults who live at the address, the amount of rent and the size of the house or apartment.

Boligstøtte is paid out on the first working day of each month.

How do I know if I’m entitled to boligstøtte?

Most people can apply for boligstøtte if they live in rented housing. There are a few living situations that can disqualify you, such as if you live with the owner of the property (including as a tenant) or if you own the property yourself and rent part of it.

You can, however, apply for the subsidy if you live in a property owned by your parents and pay rent to them (known as a forældrekøb – “parent purchase” – in Danish).

You can also apply for boligstøtte if you are sub-letting your house or flat, although the person sub-letting to you might have to change their address in order to avoid their income being taken into account in your application.

People who own their homes can receive bolistøtte (as a subsidy, not as a loan as detailed above) if they receive the state pension folkepension, or disability pension, førtidspension.

How and where do I apply?

You can submit an application via the borger.dk website at this link. The application platform will ask you to submit a rental contract and other documentation for your claim to be processed.

If you’re applying after moving to a new address, you must have registered your change of address with the national personal registry prior to applying. This can be done here. If you apply within 30 days of moving, the subsidy will be effective from the date you moved in. Otherwise, it will count from the first day of the following month from when you submit your application.

The processing time for the application can be up to seven weeks. You’ll receive a confirmation of your application via your Digital Mail inbox, and you will also receive notification here once the application has been processed.

By how much can I reduce my rent?

This depends on the various factors on which your eligibility is calculated – for some, you will not qualify to receive any subsidy at all.

There are five criteria upon which your eligibility – and the amount you receive – is calculated. They are the income of the household; the savings or fortune of people in the household; number of children and adults living at the address; size of the home (in square metres) and amount of rent paid.

You will receive more money if you have more children. For example, people who live in rented homes and are not receiving the state pension can get up to 1,039 kroner per month if they have no children; up to 3,654 kroner per month if they have 1-3 children; and up to 4,568 kroner per month if they have 4 children or more.

The borger.dk website has a tool on which you can estimate your boligstøtte here.

Source: borger.dk

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For members

RENTING

INTERVIEW: ‘Expats are targeted in Denmark by landlords who charge excess rent’

Alex Dagil, the serial entrepreneur behind the company Rent Hero has helped over a thousand foreigners in Denmark challenge excess rents. He explained to The Local why expats are targeted and why he won't take on every case.

INTERVIEW: 'Expats are targeted in Denmark by landlords who charge excess rent'

Denmark’s system of rent control is complicated, with at least four different sets of rules determining what counts as a fair rent, depending on the age, location and size of the apartment, and on what actions current and former landlords have taken to win the right to levy higher rents. 

But rent is still controlled, meaning anyone who suspects they are being overcharged can submit a complaint to their local rental board (see list here), themselves.

You can also ask Lejernes Landsorganisation (LLO, the Danish Tenants Organisation) and Dankse Lejere (Danish Tenants), two tenants unions who help members win fair rent cases. Then there are the private companies offering help reducing rents, often on a no-win, no-free basis, such as Fair Husleje and Digura. Rent Hero is alone in specialising in helping foreigners. 

READ ALSO: The four ways your rent can be regulated in Denmark

“We saw that expats were being overcharged and that they were not really any companies that tried to specifically cater to the needs of expats,” Dagil told The Local about his decision to launch the company five years ago. 

This was surprising, he said, as foreigners were and still are disproportionately affected by unscrupulous landlords.  

“Landlords who want to rent out housing at above the fair price target expats because they don’t know the rules,” he explained. “And then even if they lose a case, they limit their loss because an expat might stay in an apartment for two to three years, but if you rented out to a Dane, they might be stuck there for ten years.”

This can make a big difference to the financial impact of having excess rents corrected, he pointed out. 

If it’s decided rent should be reduced by 5,000 kroner a month, which is quite common, the landlord faces an annual loss of 60,000 kroner. If the Danish tenant remains in place for 10 years, that’s a 600,000 kroner loss. If an expat manages to get their rent reduced, they might only stay three years, limiting the loss to 180,000 kroner. 

This is why some landlords advertise apartments as available to expats only, or use expats only rental portals like Apartment in Copenhagen

“Those apartments are never available for Danes for the specific reasons which I mentioned before: The rent is super-overpriced, so they’re worried that it could be rented out to a Dane they would stay there for longer and and the likelihood of them being aware of rent control is probably also higher.” 

Some foreigners are of course naive, but others are simply in a hurry to get an address that can provide them with a CPR number, which can into turn allow them to get a bank account, and so start work. 

“They have a job, which they would very much like to start and they need to have a place to register their CPR, so they can get started with their life in Denmark. So they’re much more desperate in a housing market where everybody wants affordable housing,” Dagil explained.

The landlords offering these expat-targeted apartments will often claim that they’re providing a service that makes it easier for expats to settle. 

“They say ‘we’re offering this great product for expats’. Well, that’s fine. You’re doing a product targeted at expats. But there’s no place in the rental law for creative products targeted towards the needs of expats, because rent control is rent control. And they don’t see it that way,” Dagil said.

Rent Hero estimates that expats are charged on average 30 percent more in rent than Danes are for a comparable apartment, but for some expats, that’s a price worth paying. Dagil told The Local he found many expats are unwilling to challenge excess rents, even if they fully understand how much extra they are paying. 

“The primary issue that expats have is that they’re worried that if they start a case they’ll get evicted. What happens with their deposit, if they start a case? Those are the two primary issues. It’s never isolated. People don’t look at rent in isolation. They’re worried about, what if the landlord retaliates? What if they do x? What if I need to have my dishwasher switched? What happens then? It’s not necessarily the lack of information, which is the biggest thing holding people back.” 

Dagil said Rent Hero’s interests are more aligned with those of tenants than the big rental unions, as the rental unions generally want to take all cases to the rental board to challenge the rent, partly to set a precedent keeping rent under control for all tenants, even if it might not be in the interests of the individual tenant. 

Big landlords in Denmark increasingly appeal all decisions against them from rental boards to the higher housing court, largely because a new rule requires them to inform all tenants in a building if they accept a rental board’s decision, meaning they risk other tenants also seeking reduced rent. 

Often, Dagil said, this can mean tenants risk spending more on legal costs than they can get back in rent. 

“There’s a lot of cases we simply do not take – even though the client might win it at the rent board,” he explained. “If the tenant doesn’t have legal insurance, they will have to pay for that cost themselves. If you’re dealing with a case that might save 1000 kroner a year in rent, and you’re left with a potential court case that costs you 50,000 to 70,000 kroner to pursue, no one in their right mind would pursue these cases.”

Dagil argues that the two tenant unions will tend to push members to pursue such cases, whereas Rent Hero is more likely to seek a settlement with the landlord, that might not reduce rent to such a large extent but which will avoid the courts. Rent Hero, he says, will only advise clients to go to the courts if the amount they are being overcharged is sufficiently large, if the landlord is a relatively small landlord who tends not to appeal cases, or if the tenant has legal insurance. 

An article in Vi Lejere, a website run by the Danish Tenants’ Organisation, accuses Rent Hero on the other hand of levying “huge fees”, with one tenant ending up having to pay the company fully half of the excess rent they had recouped.  

Dagil does admit that Rent Hero is “maybe a bit more expensive”, than the other rent reduction companies. “But it’s very easy to get hold of us usually, and we’re also super-specialised,” he said. 

The tenants’ organisations are likely to push people to take their case to the rent board regardless, even though they only have a win rate of about 50 percent, whereas Rent Hero, with its no-win, no-pay structure has to focus on cases with a high chance of a quick win.  

“If they don’t have the conversation beforehand about legal insurance, it’s probable you will end up worse than you were before. And I think that what I try to strive towards is to be as honest as possible.” 

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