Weekly economics overview
The tax deduction for house improvements (håndværkerfradraget) is coming back. The government will include it in the financial law for 2025. However, there is a little twist. The only house improvements eligible will have to be related to making your house more green (energy efficient and future-proofed against extreme weather conditions). Also, there will be extra money allocated for the tax deduction for home services (gardener, cleaner, babysitter, etc.). More details once the law passes in December.
On July 1st, an executive order from the Ministry of Taxation obliged companies to register all employees that had access to a company car for more than 30 days at a time. The obligation came with a huge amount of work, including obtaining power of attorney from employees and registering them in the Motor Registry against a 340 DKK fee. This caused an uproar from the companies, leading the Ministry of Taxation to withdraw the executive order.
More than one billion DKK in parking revenue was generated for municipalities in 2023. The figures include parking fees, license fees, and parking fines. This is a record figure, with Copenhagen municipality taking home most of the cake (649 million DKK). You can see here how much your municipality earned from parking fees in 2023.
Updates for homeowners: If you became a homeowner before 2020, you might have paid too much in property taxes. Therefore, you should soon receive a refund offer from the Ministry of Taxation. At the same time, one million house owners will pay an extra bill for property tax from 2021-2023 (regardless if you owned the house in those years or not).
Focus
Life expectancy has increased in Denmark: Compared to last year’s calculations, we are expected to live 4.6 months longer. After a drop in life expectancy during the pandemic, we are back to the 2020 level. A newborn baby is expected to live up to 93 years old (male) or 95 years old (female). You can see here what your life expectancy is based on your age.
- Our Nordic neighbors, Norway and Sweden, live longer and suffer from fewer lifestyle diseases. Their life expectancy is at least one and a half years longer than in Denmark.
The Ministry of Taxation is looking into differentiated VAT for fruits and vegetables. After the “VAT-free” campaign earlier this year showed an increase in fruit and vegetable consumption of 20%, the government is considering the idea of introducing a lower VAT for these items.
