Denmark’s new government wants to cap mortgage-interest deductions at DKK 150,000 for singles and DKK 300,000 for married couples, a measure buried in the coalition platform that could hit homeowners harder than the headline tax cuts suggest.
The proposal appears in the official government foundation text published this month by Statsministeriet. It limits how much interest you can deduct each year, regardless of what you actually pay. That ceiling matters because Denmark’s housing market runs on leverage, and many homeowners rely on deductions to soften their tax bills.
The cap is part of a broader package that also abolishes the middle tax, removes the new top-top tax, raises the stock-income threshold to DKK 110,000, and lifts the tax-free estate threshold to DKK 550,000. The coalition pairs these cuts with the interest ceiling and a 15 percent surcharge on estates above DKK 10 million.
Why the cap is easy to miss
Most coverage has focused on the income-tax reductions and VAT changes on food and books. The interest-deduction limit is mentioned once in the platform, using technical language that does not make headlines. But for anyone carrying a large mortgage, the cap is not a footnote.
If your annual deductible interest exceeds DKK 150,000 as a single taxpayer or DKK 300,000 as a couple, you lose the benefit on everything above that line. Denmark’s tax revenue rose from DKK 1.225 trillion in 2021 to DKK 1.375 trillion in 2025, according to Danmarks Statistik. The government is moving large sums, and deduction reforms help fund the rest of the package.
Who gets hit
The measure targets households with high leverage, not just high earners. You can be solidly middle income and still exceed the cap if you bought property in Copenhagen or Aarhus at recent prices. The platform does not include transitional rules or phase-in details, so the timing and final form remain uncertain.
For internationals tax-resident in Denmark, the same rules apply as for Danish nationals. The official sources do not break out expat-specific estimates, but anyone with a Danish mortgage should check their annual preliminary assessment. The cap is not yet law, so current Skat guidance still reflects the existing system.
The political trade-off
Supporters will argue the cap simplifies the system and shifts relief toward ordinary income rather than subsidizing debt. The coalition is funding lower marginal rates and higher stock and estate thresholds partly by limiting how much interest the wealthy can deduct. Critics will point to homeowners squeezed between high prices and rising rates, who now face a double hit.
Mette Frederiksen’s government has pitched the package as redistribution within the tax base, not a net hike. But the interest cap is a real cost for those above the ceiling, and it falls on people who may not feel wealthy even if the system treats them that way.
What to do next
Check your current deductible interest in Danish kroner. Compare it to the proposed cap. If you are over the line, estimate the after-tax effect. The platform is not yet legislation, so monitor Skat’s guidance and the Folketing’s calendar.
The broader context matters too. Denmark’s tax system is already extracting record sums, and the coalition is redesigning how it taxes labor, capital, and consumption. The interest cap is one piece of that shift, but it is the piece that hits closest to home for anyone who borrowed heavily to buy one.
