Co-ownership agreement: buying property together

More and more Danes buy homes and property in co-ownership, with a cohabitant, a friend, a sibling or a business partner. Co-ownership can be the only realistic way onto the housing market for many, but it requires forethought and a solid written agreement. Without a co-ownership agreement, everyday decisions about the property, and especially situations involving a sale, divorce, death or disagreement, can lead to serious conflicts.

This guide explains what co-ownership is, which rules apply, and what a co-ownership agreement should contain.

What is co-ownership?

Co-ownership arises when two or more people own a property or an asset jointly. Each co-owner owns an ideal share of the property, typically 50/50, but the share can vary.

Co-ownership of real property is not governed by a single statute, but by general, unwritten legal principles and case law. The starting point is that the co-owners have equal shares, unless otherwise agreed and documented.

Co-ownership typically arises with:

• Two unmarried cohabitants who buy a home together
• Two friends who invest in a rental property or a holiday home
• Family members who inherit a property jointly
• Business partners who buy a commercial property

Why is a co-ownership agreement important?

Many let co-ownership arise without a written agreement and rely on the parties being in agreement. That rarely holds up in the long run.

Without a co-ownership agreement, the general co-ownership rules apply, and they can give unpredictable results:

• Any co-owner can as a rule demand the co-ownership dissolved. If the parties cannot agree, the property can end up being sold at a public auction
• Costs of maintenance and operation must be shared in proportion to the shares, but there is often a lack of clarity about the allocation of daily costs
• There is no automatic right of pre-emption, unless it is agreed

A co-ownership agreement sets your own rules and prevents these problems.

Who is it relevant for?

Cohabiting couples

In Denmark, cohabitants are not legally equated with spouses, neither on the end of cohabitation nor on death. A co-ownership agreement is especially important for cohabitants because:

• You have no automatic right to each other's assets, including the home
• The law does not protect you in the same way as spouses
• You cannot inherit from each other without a will

For cohabitants, the co-ownership agreement should be supplemented with a will, ideally a mutual will.

Friends and investors

If you buy a rental property, a holiday home or an investment with a friend or a family member, a detailed co-ownership agreement is decisive. Conflicts typically arise when:

• One party wants to sell and the other wants to keep
• A party cannot contribute to the costs (for example on job loss)
• A party's life situation changes (divorce, illness, moving)

Heirs

If two siblings inherit a property jointly (co-ownership by inheritance), disagreement can arise about what should happen to the property. An agreement early in the process prevents costly disputes.

What should a co-ownership agreement contain?

1. The parties' identity and shares

• Name, address and civil registration number of all co-owners
• A precise allocation of the shares (for example 50/50 or 60/40, so it reflects the actual investment)

Important about unequal shares: If the parties contribute differently to the down payment or mortgage, the allocation should reflect it. Be aware that an unequal split that does not match the contributions can have gift and tax consequences.

2. Description of the property

• The precise address and cadastral number
• The type of property (year-round home, holiday home, commercial property)

3. Financing and costs

• Allocation of the purchase price, down payment and mortgage
• Allocation of running costs: mortgage instalments, property tax, joint costs, insurance
• Allocation of maintenance costs: who pays for what?
• What happens if a co-owner cannot pay their share?

4. Use of the property

• Who lives in the property, and on what terms?
• Who has the right to use the holiday home, and when?
• Can a co-owner rent out their part (for example via Airbnb)?

5. Decision-making

• Who decides in the event of disagreement about maintenance and rebuilding?
• Do major decisions require unanimity, or can a majority (with more than two parties) decide?
• Who is responsible for the day-to-day administration?

6. Sale of the property

This is the most important part of the co-ownership agreement and the cause of most conflicts.

Right of pre-emption: If a co-owner wants to sell their share, the other co-owners should have a right of pre-emption at the same price and terms as the offer received from a third party.

A demand to sell: Under what circumstances can a co-owner demand the property sold? State a procedure, for example that notice of 6-12 months is given before the sale process begins.

Sale to a third party: Under what conditions can a co-owner sell their share to an external party, and is the approval of the other co-owners required?

Pricing: If the parties cannot agree on a price, the agreement should state a valuation procedure, for example an independent estate agent's valuation.

7. Exit scenarios

What happens when life changes?

Death: Who inherits the deceased co-owner's share? Do the other co-owners have a right of pre-emption to the deceased's share before it passes to the heirs?

End of cohabitation: If cohabitants want to separate, there should be a clear exit plan. Typically, one party is offered to buy the other's share within a set deadline, and if no agreement is reached, the property is sold.

Divorce: What happens to a share if a co-owner has married and subsequently divorces, and the share may have been brought into a joint estate?

Involuntary exit (bankruptcy, breach): What happens if a co-owner goes bankrupt or fails to meet their obligations to the other co-owners?

8. Registration

A co-ownership agreement should be registered on the property, so it is publicly known and binds future owners. Registration ensures the agreement holds up against third parties, including the individual co-owner's creditors.

Co-ownership agreement vs. marriage settlement

If the co-owners are married or are considering marriage, they must also decide whether the property is separate property or community property.

Community property (the default):

• The property's increase in value is included in the equal division on divorce
• Risk: one spouse can have a claim to half the value, even if they contributed less

Separate property (agreed in a marriage settlement):

• The property is one spouse's separate property and is not included in the equal division on divorce
• Requires a formal, registered marriage settlement

Tax matters in co-ownership

Property value tax: Paid by the co-owners who live in the property, in proportion to their share.

Interest deduction: Co-owners can deduct interest on the mortgage in proportion to their share.

Gain on sale: A gain on the sale of a year-round home that has served as the owner's home during the ownership period is as a rule tax-free (the owner-occupied-home rule in the Property Gains Tax Act). This applies to the share corresponding to the person's residential use. Holiday homes have their own rules.

Gift duty: If a co-owner transfers their share as a gift to the other co-owner, gift duty or income tax can be triggered, depending on the parties' relationship and the value of the share.

Practical advice

Start the conversation early. Most exit clauses seem academic when you are in the middle of a happy home-buying process. But that is precisely when the conversation is easiest to have.

Be specific about the finances. State precise amounts and percentages, not "a reasonable share" or "by further agreement".

Update the agreement as life changes. If your life situation changes significantly (a new job, a new partner, children), you should review the co-ownership agreement and possibly adjust it.

Consider a mediation clause. Insert a clause that disputes are sought resolved by mediation before the matter is brought before the courts.

Co-ownership with rental income: letting and tax

Do you own the property as an investment and let it to a third party?

Tax allocation of the rental income

The rental income is taxed with the co-owner who owns the share in question. With 50/50 ownership, the rental income and deductions are shared equally.

Deduction options on letting:

• Maintenance costs (ongoing, not improvements)
• Insurance and property tax (proportionate share)
• Interest on loans (proportionate share)
• Administration costs

The business tax scheme and co-ownership

Co-ownership of rental properties can in some cases be run within the business tax scheme (VSO). Contact an accountant to identify the options and limitations.

Co-ownership and mortgages: joint and several liability

If a joint mortgage has been taken out on the property, the co-owners are typically liable jointly and severally. This means the creditor can demand the whole debt from one co-owner, regardless of the internal allocation.

What that means in practice:

• If one co-owner cannot pay their share of the instalment, the bank or mortgage institution can demand that the other co-owner pays the whole
• The co-owner who pays more than their share has a right of recourse against the other

The co-ownership agreement should:

• Set a clear procedure on breach (what happens if a co-owner cannot pay?)
• State whether the paying co-owner can claim an increased share of the property as compensation

Co-ownership across generations: inheritance and succession

If you own a property in co-ownership with a sibling, and you inherit it from your parents, questions can arise about:

Succession on inheritance: If you inherit a property, you can under certain conditions succeed to the deceased's tax acquisition cost, so you take over the tax position. That can matter greatly on a later sale.

Estate duty: Inheritance above the duty-free allowance is subject to estate duty of 15% for the closest heirs. The allowance is adjusted annually and is DKK 392,300 in 2026.

Succession planning: If you are considering transferring your share to children or other relatives, there are special rules on succession and gift duty that can reduce the tax burden. Consult an accountant.

Conclusion

A co-ownership agreement is decisive when two or more people own a home or property together, and especially important for unmarried cohabitants, who are not protected by the rules of marriage. The most important elements are clear shares, a well-considered allocation of finances and costs, a right of pre-emption and a detailed exit plan for a sale, death and disagreement. Put the agreement in place while you agree, and have it registered, so it also binds creditors and future owners.

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The content of this article is for guidance only and does not constitute legal advice. Consult a lawyer or accountant for advice on your specific situation.