The taxation of the return of residential properties totally depends on the type of ownership and tenure in Denmark and the differences are seen in the computing of income, tax types and in tax rates from 0 % to above 60 %. Together with other housing subsidies this disparity of treatment in taxation contributes to the strong lack of tenure neutrality at the Danish housing market. The paper illustrates how tax rules by themselves create a line of imbalances at the housing and the residential property markets as well as the magnitude of the imbalances. Methodically, a set of return and user cost equations is used. The tax aspects of the long standing rather unequal treatment of private rental dwellings, social rental dwellings, owner-occupied dwellings and private co-operative dwellings, which have drawn decisive tracks at the markets, are discussed. The lowering of the tax rate for the return of institutional pension saving to 15 % from 2001 has created an substantial advantage for pension funds compared with private investors concerning investments in rental residential properties. The owner-occupiersí user costs and subsidization are shown to depend on their capital structure and into a large extent they will depend on, if the ownersí most obvious saving alternative will be personal investments with high taxed returns or institutional pension saving with low taxed returns. Also private co-operative associations are tax-exempted, which in combination with better legal conditions for loan raising to finance the single flats in the future are opening for, the tenure ñ as îtax free ownershipî ñ will capture a certain part of the market for owner-occupation.