The Red-Green Alliance’s 2026 property tax proposal explained
1 March 2026 · 15 min read · Market news
The Red-Green Alliance (Enhedslisten), fronted by Pelle Dragsted, proposes a 15% tax on housing gains over DKK 1 million, aimed at larger profits from selling a primary home. The proposal would mainly affect homeowners in cities with higher demand, such as Copenhagen and Aarhus.
According to the proposal, the main reasons are to reduce inequality in wealth, limit speculation and fund affordable housing and public welfare initiatives.
The proposal has, however, met notable criticism, among other things because it could reduce housing mobility, shrink supply in an already tight market, and make some people feel it is “unfair” because they entered the housing market late.
By Bodhi.The Red-Green Alliance’s 2026 property tax proposal explained
For decades, selling your home in Denmark has been a major financial advantage: if it is your primary residence, any profit is generally tax-free under the so-called parcelhusregel (the owner-occupied home rule). This long-standing rule may now come under political pressure. The Red-Green Alliance has proposed a 15% tax on housing gains over DKK 1 million, which would be a significant change in how wealth in real property is treated.
Supporters say the proposal only hits the largest gains and aims to reduce inequality and make sure rising house prices benefit society as a whole. Critics warn that it could hold back mobility and change how Danes see buying a home as a safe investment.
So what would this proposal actually mean for homeowners? Who would pay, how would it work in practice, and how big a change would it really be? Here is what you need to know.
What is the Red-Green Alliance proposing?
Who are the Red-Green Alliance?
The Red-Green Alliance is a left-wing political party in Denmark, known for its focus on inequality, workers’ rights, environmental policy and a stronger welfare state. The party was formed in 1989 as a coalition of socialist and left-wing groups and has since been a consistent voice on the left of Danish politics. It supports progressive taxation, redistribution and broader public services, reflecting its roots in eco-socialist and democratic socialist ideologies (Enhedslisten, in Danish).
Unlike many other parties in the Danish Parliament (Folketinget), the Red-Green Alliance has a collective leadership structure and positions itself to the left of the Social Democrats and the Socialist People’s Party, where it often pushes for more ambitious social and economic reforms. The party’s focus on reducing inequality in wealth and strengthening social safety nets shapes much of its political agenda, including proposals on taxation and housing policy.
Historically, the Red-Green Alliance has supported higher taxes on wealth, capital and large incomes as tools to fund public spending and reduce inequality. Although the party has not held executive power at national level, it influences debates by arguing for redistribution and offering support to broader left-wing coalitions in return for political commitments.
The core proposal explained
One of the Red-Green Alliance’s latest policy proposals is a 15% tax on housing gains over DKK 1 million. The idea, sometimes described in the media as a “moderate property gains tax”, is designed to hit the largest untaxed gains from selling homes, while ordinary homeowners still keep a basic tax-free gain.
Under this proposal
- Only the part of the gain from selling a home that exceeds DKK 1 million would be taxed, at a flat rate of 15%.
- Smaller gains below this threshold would stay tax-free, in line with Denmark’s historical treatment of primary homes.
- The plan is mainly meant to apply to primary homes, but the exact technical details (for example the treatment of holiday homes or investment properties) would have to be set out in legislation.
This is not currently part of Danish tax law, where the profit from selling your primary home is normally tax-free, and it would require changes to the existing system. When it could become law depends on political negotiations, especially since other major parties such as the Social Democrats have publicly rejected new housing taxes and instead emphasise increasing the housing supply to tackle inequality (Ni News, in Danish).
As for its purpose, the proposal is framed as a way to:
- Increase fairness in a housing market where prices (and gains) have risen dramatically
- Reduce inequality in wealth by making sure the largest property gains contribute to public funds
- Fund welfare or other public priorities through the revenue from the tax.
Supporters argue that this could help create balance in a system where long-time homeowners make large, untaxed gains simply by holding on to property in areas with high demand. Critics fear it could dampen mobility in the market and change how home ownership is seen.
How are housing gains taxed in Denmark today?
What is the “parcelhusregel”?
In Denmark, the profit from selling your primary home is generally tax-free thanks to a rule commonly called the parcelhusregel. The exemption is set out in the Danish Act on Taxation of Capital Gains on Real Property (ejendomsavancebeskatningsloven) and applies when certain conditions are met, the most important being that the property has served as your main residence and that the plot does not exceed certain limits, typically 1,400 m², unless local zoning rules prevent it from being divided (tvc).
In practice, this means that if you buy a house, live in it and later sell it for a higher price, the profit is normally not subject to capital gains tax. This applies regardless of how large the gain is. Whether you make DKK 200,000 or DKK 3 million in profit, the gain is generally tax-free as long as the property meets the rules.
The reasoning behind the parcelhusregel goes back several decades. Home ownership has long been seen as a cornerstone of financial stability and middle-class prosperity in Denmark. Lawmakers wanted to encourage people to buy and live in their own homes rather than treat housing purely as a speculative investment. By exempting primary homes from capital gains tax, the system supports mobility, long-term home ownership and the building of private wealth.
It is important to note that this exemption does not apply to all properties. Gains on investment properties, rental properties or holiday homes are typically taxable. But for ordinary homeowners selling their primary home, Denmark has historically offered one of the more generous systems in Europe.
How the proposal changes the current system
The Red-Green Alliance’s proposal would mark a departure from this long-standing full exemption. Under the current system, a homeowner with a gain of DKK 2 million pays no tax. Under the proposed model, DKK 1 million would still be tax-free, but the remaining DKK 1 million would be taxed at 15%.
The DKK 1 million threshold is politically and economically significant. It is designed to hit larger gains, especially in high-growth areas where property prices have risen sharply in recent decades, while protecting smaller or more modest gains. In other words, the change would move Denmark from a system of full exemption to one where very large housing gains are treated more like other forms of capital income, at least in part. Whether this change would reshape the housing market or only adjust it slightly is still at the heart of the political debate.
Read BY Administration’s reviews from satisfied clients on Google Reviews.
Who would be affected by the proposed housing tax?
If a 15% tax on housing gains over DKK 1 million is introduced, the effect would not be spread evenly across Denmark. Geography, age and property type would all play a part in deciding who pays and who does not.
Impact on cities and rural areas
The biggest effects would probably be felt in Denmark’s largest cities, where property prices have risen most over the past decades. In cities such as Aarhus and Odense, and especially Copenhagen, homeowners who bought property many years ago may now be sitting on gains of well over DKK 1 million.
In urban areas with high demand, price rises have been driven by population growth, limited housing supply and strong demand from both domestic and international buyers. As a result, long-term owners in these markets are more likely to be taxed on the excess profit.
In rural areas and smaller municipalities, where price rises have been slower or more stable, many homeowners would never reach this threshold. In these areas, the proposal might have little or no practical effect. This geographical divide is one reason why the debate often reflects wider discussions about regional inequality in Denmark.
Differences between generations
Age also plays a part. Older homeowners, especially baby boomers, are more likely to have bought property decades ago at much lower prices. With many years of accumulated price rises, they are statistically more likely to realise large capital gains if they sell today.
Younger homeowners, including many millennials, have typically entered the market at higher price levels. Their potential gains may be smaller in absolute terms, at least in the short to medium term. As a result, the proposal might mainly affect older generations who have benefited from long-term market growth.
First-time buyers would not be directly affected when they buy a home, but the tax could affect their future decisions about selling. It could also shape expectations of housing as a long-term investment and potentially change how the younger generation sees building wealth through property.
Property investors vs. owner-occupied homes
It is important to distinguish between owner-occupied homes and property investors. Under current Danish law, the profit from selling a primary home is generally tax-free, while gains on investment properties, rental properties or holiday homes are typically taxable.
The proposed 15% tax is mainly aimed at owner-occupied homes, as investors are already taxed on capital gains. In that sense, the reform would narrow the difference between how different types of property ownership are treated. However, as the tax would only apply to gains over DKK 1 million, it would still mainly affect homeowners with significant accumulated gains, not those who sell after only a few years or with modest price rises.
The Copenhagen housing market compared with the rest of Denmark
An important part of understanding Denmark’s housing supply and the potential impact of the proposed 15% tax is recognising the growing gap between Copenhagen and the rest of the country. Historically, house prices in Copenhagen and Aarhus developed in a fairly similar way. In recent years, however, Copenhagen has seen an explosive rise in prices, creating a much bigger gap than before.
One obvious reason is Copenhagen’s role as Denmark’s capital. The city offers more jobs, universities, cultural institutions and international connections than any other Danish city. This naturally attracts both Danish and international buyers, which increases demand for housing.
Another important factor is Copenhagen’s unique housing structure. A large share of the homes in the city are co-op apartments (andelsboliger), which are not fully privately owned like owner-occupied flats. In fact, only about 20% of Copenhagen’s housing stock is owner-occupied homes. Because these privately owned homes are relatively rare, demand for them is especially high, which pushes prices up.
Building more owner-occupied homes has also proved a challenge because of the existing rent laws. Under Danish rent law, properties built after 1991 can be let at market rents, while older properties remain subject to stricter rent control. This makes new buildings especially attractive to investors and speculators, who may prioritise rental income over increasing the supply of affordable owner-occupied homes.
If the proposed gains tax is adopted, it could affect sellers in Copenhagen far more than elsewhere in Denmark, simply because price rises and gains have been significantly higher in the capital.
Economic arguments for the Red-Green Alliance’s housing tax proposal
Reducing housing inequality
One of the strongest arguments supporters make for the proposed 15% tax on housing gains over DKK 1 million is that it could reduce housing-related wealth inequality in Denmark. Over the past decades, home ownership has become the main way many Danes build wealth, especially in cities with high demand such as Copenhagen, Aarhus and Odense. Long-term owners who bought decades ago often make gains of several million kroner, while younger generations, tenants and first-time buyers struggle to get a foothold in the market. By taxing only the largest gains, the Red-Green Alliance aims to narrow the wealth gap between generations and make sure extraordinary gains from property sales benefit the public instead of remaining entirely private.
Limiting speculation
Another important argument is that the tax could help limit speculation in the housing market. Booming urban markets have created incentives for investors, and even some homeowners, to treat property mainly as financial assets, bought and sold to generate large profits rather than to provide long-term homes. Introducing a 15% tax on gains over DKK 1 million could discourage short-term reselling and speculative ownership, which could potentially dampen the extreme price rises in the cities.
Increasing public revenue
Finally, the proposal could generate extra revenue for the state. By targeting only the largest gains, the tax could raise funds without affecting average homeowners. This revenue could then be used for welfare programmes, affordable housing or other public initiatives, creating a way to redistribute some of the benefits of growth in the property market while keeping people’s incentives to buy and stay in their homes.
Economic arguments against the Red-Green Alliance’s housing tax proposal
Reduced mobility
Critics warn that the tax could reduce mobility in the housing market. Homeowners may put off selling to avoid paying 15% on large gains, creating a “locked-in” effect. This could make it harder for people to move for work, family or lifestyle reasons, slowing the natural movement in the housing market.
Impact on housing supply
Reduced mobility could also affect housing supply. Fewer sales mean fewer properties available to new buyers, especially in urban areas with high demand. This could worsen the affordability problems the tax aims to solve and keep upward pressure on prices in some neighbourhoods.
Risk for long-term savers
Finally, opponents point to the risk for long-term savers. Many Danes see property as a safe way to save for retirement. Even though the tax only affects gains over DKK 1 million, it could make homeowners feel their long-term investments are less secure, which could potentially deter future property buyers or reduce confidence in housing as a stable way to build wealth.
Final thoughts: the Red-Green Alliance’s new housing tax proposal
The Red-Green Alliance’s proposal to tax housing gains over DKK 1 million sparks a wider debate about fairness, prosperity and the role of property rights in Danish society. On the one hand, the tax could benefit society by reducing inequality, dampening speculation and generating public revenue for welfare and housing initiatives. Homeowners with modest gains would largely be unaffected, while those who have made extraordinary profits in high-demand cities would contribute a share back to the public.
On the other hand, critics argue that the measure could discourage people from selling their homes, slow turnover in the market and undermine the view of property as a stable investment, which many Danes rely on in their retirement planning. Long-term owners of homes in urban areas may feel penalised for wealth built up over decades, and first-time buyers could still face high prices if mobility falls.
In short, the winners under this system would probably be society as a whole, which benefits from redistribution and public funds, while the “losers” could be those with large, long-held housing gains who see part of their profit taxed.
Beyond the details of this proposal lies a wider question: should housing gains remain largely tax-free in Denmark, or is it time to rethink the balance between encouraging home ownership and tackling the concentration of wealth? The answer could shape not only tax policy, but also the way Danes see property as both a financial asset and a home.
Frequently asked questions about the Red-Green Alliance’s housing tax proposal
1. What is the Red-Green Alliance’s 2026 housing tax proposal?
The proposal from the Danish political party the Red-Green Alliance aims to introduce a tax on capital gains from selling residential property above a set threshold. Specifically, the party has proposed a 15% tax on housing gains over DKK 1 million when a property is sold.
2. Why is the Red-Green Alliance proposing a housing tax in 2026?
The Red-Green Alliance argues that capital gains on homes are to a large extent unearned income for many homeowners, and that taxing these gains can redistribute wealth and raise funds for social housing initiatives.
3. How much revenue could the new Danish housing tax generate?
If the proposal is adopted, it is estimated to raise about DKK 2 billion a year for public spending on housing and urban development.
4. What is the political context for the housing tax debate in Denmark?
The proposal comes amid a wider discussion about inequality in wealth, house prices and taxation. Some other parties, such as the Social Democrats, have expressed a preference for building more homes rather than raising taxes for homeowners.
5. Is the Red-Green Alliance’s housing tax proposal law from 2026?
At the start of 2026, the housing tax proposal is still a political proposal from the Red-Green Alliance and part of a wider political debate. It is not yet law, and final adoption would require the support of a majority in the Danish Parliament.
Sources
Ritzau. (2026, February 18). Enhedslisten wants to tax housing gains over one million DKK at 15%. The Copenhagen Post. https://cphpost.dk/2026-02-18/news/round-up/enhedslisten-will-tax-housing-gains-over-one-million-dkk-at-15/
Socialdemokratiet vil bygge nye boliger i stedet for at beskatte. (2026). Ni.dk (in Danish). https://ni.dk/ni-news/id/c3cc649e-4164-48c7-ae27-a42de378e63a/Socialdemokratiet-vil-bygge-nye-boliger-i-stedet-for-at-beskatte
Tax on the Sale of Real Property. (2026). TVC Law Firm. https://www.tvc.dk/en/practice-areas/taxes-and-duties/tax-on-the-sale-of-real-property/
Vores historie (1989-2019). VORES ENHEDSLISTEN. (2025, October 23). VORES ENHEDSLISTEN (in Danish). https://vores.enhedslisten.dk/om-enhedslisten/enhedslistens-historie/
