Denmark proposes interest tax deduction cap in 2027 Finance Law

The Danish government has proposed a cap on interest tax deductions as part of the 2027 Finance Law. The measure aims to address economic inequality by limiting tax benefits for homeowners with very large loans, particularly those in high-value areas like Copenhagen and Aarhus. According to Socialistisk Folkeparti (SF) spokesperson Sofie Lippert, the current system disproportionately benefits those with the highest borrowing capacity. Calculations suggest approximately 60,000 people will be affected, though most homeowners will see no change. The policy is intended to target high-income earners with debts exceeding roughly 3 million DKK, minimizing the impact on first-time buyers.

In a separate context regarding personal finance management, debt consolidation is highlighted as a method to simplify household budgets. By merging multiple high-interest loans and various payment dates into a single monthly installment, consumers can gain better oversight of their total debt. Experts advise that when seeking consolidation, consumers should prioritize the total repayment amount and annual percentage rates (APR) rather than just the monthly payment, as extending loan terms can increase the total cost of debt.