Their main source of income is the appanage (royal provisions) granted by the Danish Parliament every year as part of the state budget.
The royals also have to pay inheritance tax and property tax, but get their paid VAT back from the state, so their cars for instance are cheaper to buy compared to your regular Danish citizens’, or other goods and services they purchase
Grace & Favour Residences
Their main residences are owned by the state, and run by the Agency for Palaces and Cultural Properties (Styrelsen for Slotte og Kulturejendomme), who put them at the disposal of the reigning monarch.
The State-owned castles occupied by the Queen and other members of the Royal Family as their private living quarters and for representation are; Amalienborg, Fredensborg, Gråsten, and the hunting lodge Eremitage Slottet.
The actual Christiansborg Castle was never used for living quarters. Instead, the apartments, designed as royal living quarters, are used by Statsministeriet, the Prime Minister’s Office.
Only the Royal Reception Rooms are used by the Queen for state visits and official matters. They are open to the public when not in use by the Queen.
The inside of the castles, where they are “tenants”, the Royal Households have to maintain themselves, but all exterior and major renovations are undertaken by the State.
Daisy Real Estate Assets
The only exceptions are the three residences that belong to the Queen as her personal properties; Marselisborg Slot, Château de Caix in France, and the royal hunting lodge in Jutland at Trend.
The costs of running these properties must be financed through their royal provisions.
Monarch-to-Monarch Asset Transfer
The royal family fund: Kongelige Danske Løsørefideikommis
The inventory used by the royal households to furnish their residences can be either private, owned by the state, or part of the Kongelige Danske Løsørefideikommis.
The Kongelige Danske Løsørefideikommis is a royal family fund, established in 1910 by King Frederik VIII and Queen Louisa. It is passed on from monarch to monarch and therefore doesn’t have to be split amongst the heirs.
Heirlooms in this fund are not subject to inheritance tax, which the royals otherwise have to pay, instead the items in the fund can be used freely by the monarch and family members.
Of course, they also cannot be sold to cover expenses.