If you are taxed in Denmark
Denmark taxes you on your worldwide income and property, including a house in Mallorca. There is no tax treaty with Spain, so Danish rules decide how the Spanish tax you already paid is credited.
Credit, not exemption
Denmark terminated its tax treaty with Spain with effect from 1 January 2009, and no new treaty is in force. Relief comes from Danish law alone: the Spanish property is declared in Denmark, and Spanish tax on the same income can be credited against the Danish tax on it (creditlempelse, ligningsloven § 33), capped at the Danish tax on that income. You do not pay twice on the same income, but you end up paying at the higher of the two levels — and both countries have to see the same numbers.
What you actually declare
While you own it
- Danish property value tax (ejendomsværdiskat) applies to a home in Spain, calculated on 80 % of the property’s value as set or accepted by Skattestyrelsen.
- Spanish taxes on the property, such as IBI, can be credited against it. Confirm with your adviser how the Spanish tax on imputed income is treated.
- The Spanish wealth tax is a separate matter and is not covered by the property value tax.
If you rent it out
- Rental income from Mallorca is taxable income in Denmark.
- The Spanish tax on the same income is credited.
- Keep the Spanish returns and payment receipts — Skattestyrelsen will ask for them.
- If the home is let commercially through a licence, both countries may treat it as business income, which changes the deductions.
When you sell
- The gain is taxable in Denmark unless the sale qualifies as tax-free. For a holiday home that is the summer-house rule, which requires that only you and your household have used it — letting it out can cost the exemption.
- The 19 % Spanish capital gains tax can be credited.
- The 3 % retention at completion is an advance, not a final tax: reclaim it in Spain, then reconcile in Denmark.
Five questions for your own adviser
Am I covered by the summer-house rule on this property, or not?
How is the Danish property value tax assessed for a house in Mallorca?
Does owning through a Spanish S.L. change my Danish position?
Which Spanish filings does Skattestyrelsen want to see, and when?
If I let the house out, is it income from property or from a business?
