On 18 April 2002, the Danish Parliament adopted a new law that increases the tax-free threshold for renting rooms in one's own home.
In the case of partial rental of the dwelling, the taxpayer can choose whether he wants a deduction for the actual expenses or whether he wants to apply the schematic rules. The advantage of applying the schematic rules is that there is no need to keep accounts with the expenses associated with the rental. In addition, the schematic rules will often result in a larger deduction than actual expenses would. This is due to the fact that there is no deduction for maintenance expenses in the case of partial rental of residential buildings.
As a general rule, there remains a tax-free lump sum deduction of 1 1/ 3% of the property value or 2/3 of the sublease's own annual rent in the case of a rental dwelling.
Now the Danish Parliament has decided that the minimum deduction must always be at least DKK 24,000.
The rules can be illustrated with the following example:
The property value is 1 million.
The basic deduction is 1 1/ 3% of DKK 1 million or DKK 13,333, but not less than DKK 24,000.
The law has no meaning if the property value is more than DKK 1.8 million, since the floor deduction already exceeds DKK 24,000 for these properties.
Entry into force
The Act has effect for the income year 2002 onwards.
Disclaimer
The above information is for guidance purposes only, and we accept no responsibility for decisions made based on this information without prior individual advice. We accept no responsibility for errors or omissions.
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