How to Buy a House in Denmark
Buying a house in Denmark has a residency hurdle and requires "that persons who have no permanent residence in Denmark, and have not previously lived in Denmark for a consecutive period of five years, obtain the permission of the Danish Ministry of Justice," according to the Ministry of Foreign Affairs of Denmark. Given the legal documentation requirements, purchasing a home in Denmark will usually require four to six months of work with legal professionals.
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Instructions
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Apply for a mortgage with a bank or mortgage credit organization. Banks will generally allow up to 80 percent of the property value to be borrowed, assuming solid credit and documentation by the buyer. A buyer's certificate from the lender will confirm the mortgage arrangement.
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Hire a lawyer or solicitor to review the purchase agreement, which will be prepared by the seller's lawyer. A deposit for the first part of the down payment will be made with the executed purchase agreement, "which is 5% of the cash price" according to the website Global Property Guide. The buyer generally has six days after signing the purchase agreement to cancel it but will pay 1 percent of the purchase price to the seller if the contract is nullified.
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Hire a property inspector to review the house for proper construction and maintenance. The seller usually provides a property report detailing the home's condition to execute a transfer deed at the time of sale. If a report is not provided, the seller may be held responsible for up to 20 years for existing defects or damage to the house.
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Execute a deed of conveyance, as drafted by the home buyer's attorney. "The deed of conveyance assures the buyer has clear title to the property once the deed has been recorded at the local land registry office." Once recorded, the official owner document is issued to the home buyer by the registry office.
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Tips & Warnings
As an example of recent market pricing in Copenhagen, "the average price per square meter during the first quarter of 2010 was 22,217 kroner," or about $3,600, according to a May 2010 New York Times article.
Transaction costs include a deed tax "of 1,400 kroner, or about $230, plus 0.6 percent of the purchase price; if a buyer acquires a mortgage, there is a tax of 1.5 percent plus 1,400 kroner," as of May 2010 according to the Times article.
Apply to the Danish Ministry of Justice for a residency permit or have proof of European Union (EU) national status. Approval requires that the home buyer confirm the property will be used as a year-round residence. According to the Times article, application to the Danish Ministry of Justice is a process that "typically takes about four weeks and involves a nominal fee."
References
Resources
- Photo Credit Frederikshavn in Denmark image by Einar Bog from Fotolia.com
