With no property assessment in sight, consultants are shovelling away money

Creating a fair assessment of the value of housing is so difficult that the Danish authorities are struggling to come up with one. Meanwhile, consultants have been paid large sums for help that has not yet worked

Ben Hamilton

Jun 2, 2023

The Danish property market is a tax jungle.

Homeowners pay many thousands of kroner annually based on a public assessment of the property’s value. Add to that the collection of waste, subsidies for the recycling site, chimney sweeps and charges for municipal maintenance.

Those fees are easy to price, and this is reflected in the authorities’ calculation of how much a property should pay in tax. But in a housing market where prices have risen a lot, especially in the capital area, it has proved almost impossible to arrive at a fair assessment of the houses’ value.

It has been going on for years, and many Danes have probably given up on a solution. When you sell your house in Denmark, you do not have to pay tax on your income. Many homeowners have large equity in their home and become millionaires when they sell. But over the past year, prices have fallen, and thus it is an uncertain market.

Successive tax ministers have worked to create a IT system that ensures fair property assessments. It has so far failed, and on the other hand, it has become expensive for many taxpayers.

Consultants having a great time
DR has calculated via a document review that from 2017 to the end of 2022 over 1.7 billion kroner has been spent on external consultants and suppliers for the IT system that will make the new assessments. This year too an additional three-digit million amount will be used.

This is happening while the government aims to cut the use of external consultants.

“It is quite obvious that you have not received sufficient quality for the money you have spent on consultants. The system should never have cost such a large amount of billions,” claims associate professor emeritus Erik Frøkjær, an expert in computer science at the University of Copenhagen.

Minister decline to comment
DR has asked for an interview with the tax minister, Jeppe Bruus.

They would like to ask how more than 1.7 billion kroner is connected with the government’s ambition to use fewer consultants in the state and how he generally thinks the financial management of the new property assessment system is coming along.

However, Bruus has declined an interview for now.