That seems like a contrived example. Say, Peter borrowed 95% of the money in 2011 for 30 years, i.e. 1.9 million. Assuming equal principal repayments, he still has approx. 1.5 million of debt in 2017. After selling the apartment for 4 million, he would have 2.5 million for the downpayment (and it's without any transaction costs). How would he be able to borrow the remaining 5 million without a massive improvement of his cashflow? Am I missing something?
Greetings from Ukraine, Mario! Thank you for your videos full of useful and interesting information. I watch them with huge pleasure. I hope to get a job in CPH by the end of the year and move there with my family. I wish you good luck, keep doing amazing things!
If you sell your primery residance higher than you bought it, it means housing prices have gone up, that 15 million is not really a profit, since all houses are now much more expensive and he needs one. It’s basically inflation, it appears like you profiting, but you are not.
Although Peter's strategy is attractive, relocation itself has some non-financial risks. (Finding a nice property can be rather easier than having good neighbours, which is largely based on luck.) Since I'm quite happy with my current flat and the neighbours, I will stick to it... unless/until my situation changes.
Dang the taxes are genuinely brutal. I wish there was a system that had good safety nets but like investment gains weren’t taxed heavily and not much income tax. If governments were genuinely run efficiently there would be no need for such high taxation in some countries. Im not sure about Denmark tho.
what do you think about expats that we stay for 5 to 10 years? All my money is in investments outside Denmark and I just buy do not sell any, same with crypto
This is not a hack in the system, but the only way the apartment market can work in Denmark. If you start charging capital gain - the whole market will collapse.
Hej! Interesting video. I was just wondering - you say Party Peter is in a better situation than saver Sarah and on paper a millionaire, but does he not also have to have a well paid job to keep up with his loan payments (RealKredit loan)?
Not really, the past 10 years (but not the last 1.5) you could get 1-2% interest loans and then get a interest-only setup ... low costs. The only con is that the more expensive the house the higher the taxes
Mario I think that this is a very singular and one sided view. I do not doubt that situations like these exist, but I don't think that it can be generalised. The housing market can crash, and it has, and it will again in the future. I agree that real estate is one option, and can be a good one for certain people, but not for wveryone. What if you buy a house for 7 mil in cph and then the housing market crashes and you can't make your payment because you have been fired? What if party peter invested into bitcoin in 2012 and made tens of millions of euros? Or let's not go extreme, he just invested in something that brought him 10% per year, but he has no overheads (replace roof, other costs with house) and he is not stressed if he will be able to make the next payment? No doubt that skat will take a big chunk of his money, but he's quite liquid and stress-free. I am not saying that one is better than the other, because it is clearly not, I am just saying that it can be different for different people
Also, regarding Sarah, if you invest in Danish-based funds, you do not need to pay yearly taxes on unrealized gains, only when you sell. This is regarding the part "she payed taxes every year even if she did not sell".
Ciao Mario, thanks a lot for your content. What is the downside of sending money to your (or another) country and investing in index funds there (should the tax system be more appealing than the Danish one)? Could you be prosecuted by SKAT?
You can't. As long as you live and work in Denmark, you are tax liable and obliged to pay taxes to SKAT. Furthermore, if you have a portfolio and decide to leave Denmark, you will be forced to sell before you leave the country. There is no way around it.
Thanks both. I just don't see how SKAT will know if a person sends money to an account abroad and then operates with that money while abroad. That money has already been taxed in DK.
They are monitoring transactions and talking to different banks. I cannot say if they will catch you 100%, but doing it without declaring your assets abroad is illegal.
@@kaka22yo i think it is possible, yes you have to pay ttax in denmark when you sell. But if you don't sell you are getting better profit on paper and if you leave denmark in few years and move to a lower tax'ed country then you have better net worth.
Hola Mario, muchas gracias por tu video, esta ventaja fiscal es sobre la primera vivienda pero que opinas sobre comprar inmuebles en otros paises de europa, tendria sentido comprar la primera vivienda en Dinamarca y luego en otros paises.
Very interesting, as I am soon to arrive in Denmark I could not help but wonder about the correct saving strategy. I can see why in a true first world country it would seem less risky to go with the real estate route compared to a third world country like Argentina. If you do not mind, are you aware of real life examples, be it personal or ones that you found online regarding success stories for expats in the danish real estate market? Thanks
Then again, if Peter had bought the most expensive property he could finance in 2006, he would have been in deep trouble.
Yep
That seems like a contrived example. Say, Peter borrowed 95% of the money in 2011 for 30 years, i.e. 1.9 million. Assuming equal principal repayments, he still has approx. 1.5 million of debt in 2017. After selling the apartment for 4 million, he would have 2.5 million for the downpayment (and it's without any transaction costs). How would he be able to borrow the remaining 5 million without a massive improvement of his cashflow? Am I missing something?
How much you put down as downpayment makes a difference for the borrowing multiple
Mario, I love your videos. I'm binging them hehe. Thank you so much.
Glad you like them!
Greetings from Ukraine, Mario!
Thank you for your videos full of useful and interesting information. I watch them with huge pleasure.
I hope to get a job in CPH by the end of the year and move there with my family.
I wish you good luck, keep doing amazing things!
Thanks for the nice message and good luck with the job !
If you sell your primery residance higher than you bought it, it means housing prices have gone up, that 15 million is not really a profit, since all houses are now much more expensive and he needs one. It’s basically inflation, it appears like you profiting, but you are not.
Your equity is higher though
Although Peter's strategy is attractive, relocation itself has some non-financial risks. (Finding a nice property can be rather easier than having good neighbours, which is largely based on luck.) Since I'm quite happy with my current flat and the neighbours, I will stick to it... unless/until my situation changes.
Dang the taxes are genuinely brutal. I wish there was a system that had good safety nets but like investment gains weren’t taxed heavily and not much income tax. If governments were genuinely run efficiently there would be no need for such high taxation in some countries. Im not sure about Denmark tho.
what do you think about expats that we stay for 5 to 10 years? All my money is in investments outside Denmark and I just buy do not sell any, same with crypto
You'll be taxed once you leave Denmark regardless
@@MarioScianHQ well, ok, is very difficult for them they know....
This is not a hack in the system, but the only way the apartment market can work in Denmark. If you start charging capital gain - the whole market will collapse.
Hej! Interesting video. I was just wondering - you say Party Peter is in a better situation than saver Sarah and on paper a millionaire, but does he not also have to have a well paid job to keep up with his loan payments (RealKredit loan)?
Not really, the past 10 years (but not the last 1.5) you could get 1-2% interest loans and then get a interest-only setup ... low costs. The only con is that the more expensive the house the higher the taxes
I wonder if the same applies to 2 unit houses or 4 unit houses?
Only to your primary home
Same in the UK
But Peter pays High property tax and if House Price increase only little bit, he gets problem .
Does he?
Mario I think that this is a very singular and one sided view. I do not doubt that situations like these exist, but I don't think that it can be generalised. The housing market can crash, and it has, and it will again in the future. I agree that real estate is one option, and can be a good one for certain people, but not for wveryone. What if you buy a house for 7 mil in cph and then the housing market crashes and you can't make your payment because you have been fired? What if party peter invested into bitcoin in 2012 and made tens of millions of euros? Or let's not go extreme, he just invested in something that brought him 10% per year, but he has no overheads (replace roof, other costs with house) and he is not stressed if he will be able to make the next payment? No doubt that skat will take a big chunk of his money, but he's quite liquid and stress-free. I am not saying that one is better than the other, because it is clearly not, I am just saying that it can be different for different people
Good call out, but I want to stress that over the past 10 years this was the best way to go
Also, regarding Sarah, if you invest in Danish-based funds, you do not need to pay yearly taxes on unrealized gains, only when you sell. This is regarding the part "she payed taxes every year even if she did not sell".
The Danish-based funds pay a yearly dividend on the performance of the past year, which in effect it's the same as paying unrealized gains
I agree, but this exemplifies how fucked up investing is in Denmark.
For the dividends yes, but not for the appreciation of the fund(s), so I'd say partly the same as paying unrealized gains.
Ciao Mario, thanks a lot for your content. What is the downside of sending money to your (or another) country and investing in index funds there (should the tax system be more appealing than the Danish one)? Could you be prosecuted by SKAT?
You can't. As long as you live and work in Denmark, you are tax liable and obliged to pay taxes to SKAT. Furthermore, if you have a portfolio and decide to leave Denmark, you will be forced to sell before you leave the country. There is no way around it.
Yep, correct - if you live in Denmark you're taxed in Denmark
Thanks both. I just don't see how SKAT will know if a person sends money to an account abroad and then operates with that money while abroad. That money has already been taxed in DK.
They are monitoring transactions and talking to different banks. I cannot say if they will catch you 100%, but doing it without declaring your assets abroad is illegal.
@@kaka22yo i think it is possible, yes you have to pay ttax in denmark when you sell. But if you don't sell you are getting better profit on paper and if you leave denmark in few years and move to a lower tax'ed country then you have better net worth.
Hola Mario, muchas gracias por tu video, esta ventaja fiscal es sobre la primera vivienda pero que opinas sobre comprar inmuebles en otros paises de europa, tendria sentido comprar la primera vivienda en Dinamarca y luego en otros paises.
Depende para que, en principio si tenes propiedades en e.g., Alemania tambien tenes que pagar impuestos sobre las propiedades aca tambien
You are not considering that Denmark could change the tax law and introduce taxation on those capital gains. The world is changing.
I rather have taxation on those gains and then removal of the insanely high property taxes that are justified per us not having capital gains
Very interesting, as I am soon to arrive in Denmark I could not help but wonder about the correct saving strategy. I can see why in a true first world country it would seem less risky to go with the real estate route compared to a third world country like Argentina. If you do not mind, are you aware of real life examples, be it personal or ones that you found online regarding success stories for expats in the danish real estate market? Thanks
Yes, many examples - maybe not as crazy as Party Peter's but I can attest myself that investing in 2017 in an apartment has paid off
Just want to say , Argentina campion del Mondo :D !! vamos vamos
But the danish real estate is going down atm
It has gone up the past months again
I invest in Monero instead. See you in 10 or years, we will see how well it will age :D
haha Monero at least has a clear use case :D
Why do people say the Danish are the happiest people on the planet?
The majority of the people can live a "good" life incl. work-life balance without having to have fancy jobs
How to get rich video 😂
But love ur content Mario
haha thanks