Denmark’s tax authorities have admitted that around 100,000 final property valuations sent to apartment owners were produced with a flawed valuation model.
The admission from Vurderingsstyrelsen, the Danish Property Assessment Agency, came after weeks of questions from DR Nyheder. As DR reports, the agency acknowledged that an error in the model itself affected the valuations already mailed out.
The documents in question are the final 2022 valuations of owner-occupied apartments, which the agency has been sending out since the turn of the year. They cover roughly one third of the approximately 300,000 apartments due to receive a final valuation under the new system.
The error means some apartments were valued too high and others too low. Agency director Anne-Sofie Jensen described the mistake as regrettable, but rejected that it causes major problems for most of the owners affected, according to DR.
In about 20,000 of the valuations, the figure is off by more than 20 percent. By the agency’s own yardstick, those fall outside the valuation norm, which allows a deviation of plus or minus 20 percent from an expected free market price. Jensen said the remaining 80,000 valuations therefore still meet the norm.
Error found in the spring
According to the agency, dispatch of apartment valuations was halted during the spring, when it was warned about the problem. By then the first 100,000 final valuations had already been sent. The case has been kept internal since then, with no public announcement.
The agency says the fault arose while it was fixing a different error in the model behind the new valuations. Newly built houses were being compared with older neighboring houses and given large additions. The model was changed for the 2022 valuations, and that change went wrong for apartments.
Vurderingsstyrelsen only discovered the new problem after objections from affected owners and inquiries from several consultancy firms. On the agency’s own Vurderingsportalen website last summer, the change was described as one of several minor adjustments.
Law professor Rasmus Grønved Nielsen of the University of Copenhagen called it a serious error in remarks to DR. He noted that the final valuations were repeatedly promised to be better than the preliminary ones used to tax homeowners for years.
The affected valuations have already passed a four-week consultation period and a three-month appeal deadline. Jensen said the agency is still analyzing how best to solve the matter and will contact the individual homeowners directly. She would not promise a solution this year, and could not say what it will mean for the property tax bills involved.
Vurderingsstyrelsen has resumed sending out apartment valuations using the revised model. Jensen said she is not aware of further problems with the model. She could not date when the Ministry of Taxation was informed, and a promised timeline had not reached DR.
