Denmark’s Parliamentary Ombudsman is challenging the Tax Agency to prove whether it can actually stand behind the calculations used for millions of property valuations. The investigation raises serious questions about whether homeowners and appeals boards can verify if assessments are accurate, potentially undermining the entire complaint system.
Fundamental Questions About Property Valuations
In a new letter, the ombudsman has posed several fundamental questions about the entire foundation of Denmark’s new property valuation system. The main concern is whether authorities can even document how a specific valuation was calculated.
The ombudsman stated that based on the information homeowners receive with their property valuations, they may not have any way to verify the underlying calculations. Instead, they must simply trust that the calculations are correct.
Homeowner Denied Access to Calculation Details
The new investigation follows cases where several citizens have unsuccessfully tried to gain insight into the technical calculations behind their valuations. The ombudsman’s inquiry stems partly from a complaint by homeowner Claus Bo Christensen, who was unable to find out how his land value was calculated.
The case reached the watchdog’s desk two days after a September article in Berlingske covered the homeowner’s attempts to understand his property assessment calculations. Before the end of the year, the Valuation Agency wrote to the ombudsman explaining that it does not save the complete calculations behind the new public property valuations.
Theoretical vs. Practical Reality
The agency explained that calculations could theoretically be recreated, but this would require a new data run for all properties in the original batch, which includes multiple properties. For the ombudsman, this answer is far from clear enough.
After reviewing the Valuation Agency’s statement, the ombudsman noted it remains unclear what this actually means in practice. Specifically, whether the agency can always recreate and document calculations in reality, not just theoretically.
Impact on Appeals System
The ombudsman now wants the Ministry of Taxation, which oversees the agency, to answer specifically whether the Valuation Agency actually has oversight and can document how a particular property valuation was created. Concretely, he wants to know if the agency has access to all the information and calculations behind a valuation and whether they can recreate them in practice.
The ombudsman is asking whether recreating calculations is possible in reality or practically impossible, for example because it would require too many resources. Meanwhile, the ombudsman warned that if neither citizens nor appeals bodies can gain insight into underlying calculations, it could hamper the entire appeals system’s function.
Verification Requirements for Appeals
When a homeowner appeals, appeals bodies like the Tax Appeals Agency must also be able to fully verify a valuation. However, this requires that complete calculations can be documented. If this is not possible for the tax authorities, then the entire case is undermined along with the ability to test whether specific valuations hold up, according to the ombudsman.
The question of whether the Valuation Agency can explain to homeowners and other stakeholders, such as an appeals body, about underlying calculations for a specific property valuation depends primarily on whether the agency itself has full insight and can document the calculations.
Minister Previously Promised More Transparency
The agency previously told the ombudsman that if homeowners should be able to gain insight into the calculations, it would require the tax authorities to create functionality to save calculations in a format that owners can access. According to the agency, this would be extensive and require significant resources.
Both the Valuation Agency and the Ministry of Taxation have previously acknowledged that communication to homeowners needs improvement. Work is underway to make valuations more understandable and comprehensive, the ministry previously told the ombudsman.
Balancing Complexity and Transparency
The Ministry of Taxation noted it is aware of the Valuation Agency’s complex task of creating balance regarding the content in declaration and valuation notices. These should appear as clear as possible while simultaneously providing sufficient information about underlying calculations for decisions.
The ministry also pointed out that former tax minister Jeppe Bruus promised in 2023 to examine how to provide a more technical explanation of the valuation model and the data behind it. The Development and Simplification Agency, which manages the IT system for the new valuations, would consider how to provide a deeper technical introduction to the valuation model and underlying data within the framework of legislation.
Interestingly, these considerations are still ongoing, the Ministry of Taxation wrote in its letter to the Parliamentary Ombudsman before Christmas. The ministry now has six weeks to answer the ombudsman’s new questions. This situation connects to broader concerns about Denmark’s property tax chaos, which has created uncertainty for homeowners across the country.
Sources and References
The Danish Dream: Denmark’s Property Tax Chaos Worsens With New Delay
The Danish Dream: Buying Property in Denmark for Foreigners
DR: Nu presser ombudsmanden Skattevæsnet: Kan I selv stå inde for beregninger bag nye vurderinger?
