News for Associations

On April 15, 2024, an important day for many cooperative housing associations arrived. It was the day when a new law on valuation in cooperative housing associations came into force. On this page, we have gathered the questions that our cooperative housing associations have asked us, as well as our answers and recommendations.

Please note that the answers are indicative, as no associations are alike. Therefore, we recommend that you discuss with your regular contact person at DEAS if you have any questions about how the law affects your specific cooperative housing association. You can read the legislative proposal in its entirety here.

What does the new valuation law for cooperative housing associations mean?

At DEAS, like our associations, we have been waiting patiently for this law proposal, and it has now finally been passed. This means that we now have a new and established method to calculate the individual association's cooperative unit value.

Specifically, the new law means the following:

• The validity of appraisals is extended to 42 months (3.5 years) instead of the previous 18 months (1.5 years).

• Appraisals made before April 15, 2024, will also be covered, meaning that an appraisal made on 31.12.2023 will be valid until 30.06.2027.

• Public assessments will be indexed to the net price (typically from 2012, when the last one was made) and will thus follow the general price development in Denmark.

What does the new law mean for my cooperative housing association if we currently use the public assessment for calculating the cooperative unit value?

In short, the latest public assessments will now be indexed to the net price, so they follow the general price development in Denmark. This will mean an isolated increase of approximately 20% the first time for those cooperative housing associations that value according to the public assessment, corresponding to the development since October 2012. However, it is important to emphasize that other factors in the association's accounts can also affect the cooperative unit value, so this impact cannot be expected 1:1.

What does the new law mean for my cooperative housing association if we currently use an appraisal for calculating the cooperative unit value?

The validity of appraisals is extended to 42 months, allowing you to only obtain a new appraisal every 3 years instead of every year. However, this assumes that you record the property at acquisition cost in the balance sheet.

If you instead record the property at fair value/appraisal, you will still need to obtain a new appraisal every year for this purpose – alternatively, you should consider changing the accounting practice to record the property at acquisition cost. If you are considering the latter, we encourage you to contact your administrator and auditor for further discussion.

Some associations that currently use an appraisal will also be able to achieve a higher cooperative unit value based on the public assessment after its net price indexing, allowing them to benefit from switching valuation methods.

What does the new law mean for my cooperative housing association if we currently use the acquisition cost for calculating the cooperative unit value?

As the public assessment will increase by approximately 20% upon first indexing, some associations will find that they can now achieve a higher cooperative unit value by switching to valuation based on the public assessment. There are several factors, such as the market value of your debt, that influence whether this will be an option. Contact your regular administrator if you want to discuss this further.

Does the new law offer other opportunities besides a value increase or a saving on appraisals?

The value increase gives cooperative housing associations the opportunity to assess whether to initiate or set aside for the construction projects they have in the pipeline. Where a typical larger construction or maintenance project would result in a decrease in the cooperative housing association's wealth, this increase may provide an opportunity to carry out certain projects while maintaining stable development in the cooperative unit value, as the expense can potentially be covered under the value increase.

Likewise, a provision for general value losses can be considered.

Will the new law affect our land tax?

No. The new valuation law for cooperative housing associations solely concerns your property assessment, which is used to determine your cooperative unit value.