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LIFE IN NORWAY

EXPLAINED: The incentives to attract people to northern Norway

Lower taxes, student loan write-offs and free childcare are among the incentives to attract people to northern Norway in order to combat depopulation.

Published: 31 July 2023 12:11 CEST
Updated: 5 August 2023 09:20 CEST
Troms
The Norwegian state has tried out a broad range of support measures to get people to stay – and thrive – in northern Norway. Photo by Ludovic Charlet on Unsplash

In the last two decades, the number of births in northern Norway has fallen by 35 percent, and the situation is most dire in the Finnmark and Nordland counties.

A 2021 survey among 1,500 young people in southern Norway aged 20–40 showed that only 3.6 percent considered moving to northern Norway.

It is no surprise, then, that the Norwegian state has tried out a broad range of support measures to get people to stay – and thrive – in northern Norway.

While these measures haven’t had a major effect, they have been broad in scope, ranging from lower income tax to investments in transport and reforms in health and education.

But what is the current incentive framework for people who want to move – or stay – in northern Norway?

The action plan was introduced in 1990 to combat high unemployment and a collapse in the local fishing industry. 

The Finnmark and Nord-Troms action zone

Many state incentives related to attracting people to northern Norway are aimed at young people.

Furthermore, these measures target Finnmark and Nord-Troms, which are particularly affected by depopulation, by categorising them as an “action zone.”

As Troms og Finnmark County points out on its website, this zone aims to “create an attractive region to live, work and run businesses in.”

The zone includes all municipalities in Finnmark as well as the municipalities of Kåfjord, Skjervøy, Nordreisa, Kvænangen, Karlsøy, Lyngen and Storfjord in Nord-Troms.

The benefits of living in the action zone

So, if you have a residential address and place of work in the action zone, you’ll be eligible for several financial advantages.

Some of the most prominent are tax cuts. As the authorities point out, special rules apply to the tax on ordinary income for taxpayers in Finnmark and Nord-Troms. Residents pay a base-rate of 18.5 percent on their income tax rather than 22 percent, which amounts to around 20,000 kroner less in taxes for somebody earning the national average income. 

Along with that, electric power supplied to households and public administration in the action zone is exempt from electricity tax.

Businesses in the action zone pay a reduced fee for power supplied, and there is also no VAT on electricity supplied in the area. Furthermore, there is also an exemption in place regarding employer’s tax.

Parents – and prospective parents – are also incentivised to pick northern Norway to start a family. From August 1st, 2023, nursery places are set to be completely free of charge in Nord-Troms and Finnmark. The Norwegian government predicts that this will save families around 60,000 kroner per year. 

If you’re a student, you have good reason to consider getting your education in the north of Norway.

If you live in Finnmark or some municipalities in Troms, you can have a part of your student debt – up to 20 percent of the original loan base, limited to 30,000 kroner a year – written off from the Norwegian State Educational Loan Fund (Statens lånekasse for utdanning).

Just know that you must live in the action zone continuously for 12 months to apply to get your debt reduced.

How much can you save through these incentives?

What does this actually mean in terms of potential savings?

According to a rough calculation from Troms og Finnmark County, a family consisting of two adults and two children can save up to 160,000 kroner a year.

The calculation assumes the full effect of student loan write-downs ( 30,000 x 2 = 60,000 kroner), daycare savings for two children implemented on August 1st (60,000 kroner), and an ordinary income tax deduction for Finnmark (20,000 x 2 = 40,000 kroner).

On top of this, a family in the action zone would also benefit from the exemption from electricity tax for households.

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NORWAY EXPLAINED

The things you won’t see in Norway that are common elsewhere

When you move to (or visit) a new country, you almost inevitably encounter a bit of culture shock - or, at the very least, some surprising social norms and experiences.

Published: 22 April 2024 15:50 CEST
The things you won't see in Norway that are common elsewhere

Moving to Norway – or just visiting it as a tourist – offers no shortage of incredible sights and experiences that you’ll struggle to find anywhere else.

However, among these features lie several elements of European urban life that are conspicuously absent from life in Norway, drawing curious glances from visitors accustomed to their presence elsewhere.

With that in mind, The Local has compiled a list of things you might find noticeably – and somewhat oddly – missing from day-to-day life in Norway.

A (mostly) cashless society

In a world where cash is king, many newcomers to Norway remain baffled by the apparent absence of cash in everyday transactions.

In most Norwegian cities, it’s not uncommon for people to see entire months pass without a single physical coin or banknote changing hands.

Instead, most people use electronic payment methods such as the widespread Vipps e-payment app, mobile payments, and contactless cards, effectively rendering cash obsolete in many scenarios.

Ordering takeout? There’s Vipps.

Going shopping? You pay via card.

Paying the mortgage rate? Online banking.

Donating at church? Vipps again.

As Håkon Fyhn, an associate professor at NTNU who researches robotisation, digitisation, and automation, told The Local in a recent interview, Norwegian society is characterised by a high level of trust in government and banks, so people don’t use cash because they trust digital money.

EXPLAINED: The pros and cons of Norway going cashless

“The short answer is that for most people in Norway, there are now digital alternatives that are more convenient to use and readily available – notably credit cards (on plastic or phone) and Vipps (a Norwegian phone-based money transfer service) for small and medium exchanges,” he said.

Homeless people in Norway

Wandering the streets of most of Norway’s cities, you’ll likely notice the absence of a demographic that tends to be, unfortunately, quite present in urban landscapes in Europe – homeless people.

Homelessness has significantly declined in Norway since 2012, with numbers halving, according to recent data.

This reduction can be attributed to a concerted strategy that emphasises the development of housing and support services, alongside the cultivation of expertise in addressing homelessness, as reported in a 2022 article by Husbanken Norway.

Efforts have been particularly targeted at vulnerable groups within the housing market, with a specific focus on families with children and people grappling with substance abuse and mental health issues.

According to a national survey on homelessness in Norway conducted in 2020, the total number of homeless people was 3,325.

Considering the country’s population of approximately 5,400,000 inhabitants, this is a rate of 0.62 homeless persons per 1,000 inhabitants, which is considered relatively low.

No piles of trash on the street (for the most part)

While bustling tourist hubs – such as the Lofoten Islands in the north of Norway or the Trolltunga rock formation in Vestland Country – can become full of trash in peak tourism season, generally speaking, Norway’s streets tend to be very clean compared to some other European countries.

With a deeply ingrained culture of personal responsibility for waste management, many Norwegians maintain their urban environments to a very high standard, making ugly piles of trash a rare sight.

READ MORE: What you need to know about rubbish and recycling in Norway

The widespread adage is to leave every place cleaner than how you found it. Therefore, don’t be surprised when you see picking up others’ litter in the woods, on hikes, or on walks through their neighbourhoods.

That being said, there is a very intense debate on the over-tourism of Norway’s top attractions – and the negative impacts of this phenomenon – going on in the country at the moment. The Local has covered this issue in more detail in this article.

Few skyscrapers

Norway’s skyline starkly contrasts the towering cityscapes synonymous with many other Western countries.

Even in Oslo, the country’s capital, strict building limits curtail the construction of skyscrapers. Instead, the cityscape is usually dominated by low to mid-rise buildings.

The situation is more or less the same in other major Norwegian cities, such as Bergen, Stavanger, and Trondheim.

Furthermore, as Norway is spread across vast stretches of land, its population is thinly scattered across the expansive terrain.

Therefore, historically, the necessity for towering skyscrapers to make use of urban real estate hasn’t been pressing, given the abundance of space available (outside major urban centres).

READ MORE: Property prices in Norway to surge over the next few years

Factors such as population pressure, limited supply, and growing demand in the real estate market in the country’s major cities are raising questions about whether this should continue.

Where are the curtains?

Another curious absence that might go unnoticed until pointed out is the absence of curtains on the windows of Norwegian homes.

Unlike in many other countries, where curtains are a common decoration for privacy, Norway’s residents often forego this conventional window dressing, preferring unrestricted views of the surrounding landscapes and prioritising more natural light during the day.

Interestingly, the prevalence of curtains varies across different districts and neighbourhoods, with areas with higher populations of international residents at times featuring a higher concentration of curtain-clad windows.

This may stem from a desire to cater to the preferences of those accustomed to the conventional use of curtains for privacy.

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