The deduction for guarantee commission is one of the more unknown and overlooked deductions. It is particularly relevant in a year like 2019, when interest rates have been historically low and many people have chosen to convert their mortgages. Here, upwards of 100,000 Danes can pick up up to several thousand kroner on this deduction.
It's one of the few deductions for bank and mortgage expenses that isn't automatically reported, so you'll have to work out what you can deduct.
In this article we will go through:
A guarantee commission is a type of fee that a bank charges, for example, in connection with the rescheduling of a mortgage. This is because, while the new loan is being registered with the state, known as a deed of title, the bank provides a guarantee for the loan. This can also happen when you buy or sell your home.
Some banks charge a percentage of the loan amount, so the fee can quickly add up to a few thousand, especially if it takes a long time to get the loan registered.
You can see an example of what this could look like in a document from the bank here:
Guarantee commission is one of the few bank-related deductions that is still not reported automatically. According to Henning Boye Hansen, chief consultant at audit firm BDO, this is because the legislation dates back to a time when few loan conversions were made. Therefore, there was not the same use of the deduction in the past as in recent years, when interest rates have fallen a lot.
Some banks remind their customers to report the deduction, but this is quickly forgotten in a busy day.
In other banks, such as Nordea Kredit, customers usually do not pay a guarantee commission, as a so-called fixed rate agreement is made instead
In TaxHelper, we help you find the deductions you're entitled to. You answer a few simple questions that take just 15 minutes to complete.
Then we report the deductions, and you get an extra DKK 2,704 back in tax. At the same time, you only pay if you get a tax saving.
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