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TAXES

EXPLAINED: How Norway’s property tax works

Local authorities in Norway can tax homeowners living in the area and even set the tax rate. Here's how the tax works and how to check whether you'll need to pay it.

Published: 19 August 2024 12:51 CEST
Pictured is an apartment building in Oslo.
Norway's property tax is applied at a municipal level. Pictured is an apartment building in Oslo. Photo by Marla Prusik on Unsplash

Municipal councils in Norway can decide whether to implement a property tax and as a result, most local authorities use the extra tax to fund spending.

Local authorities can also decide which properties will be taxed and the applicable tax rate.

At the time of writing, there are 357 municipalities in Norway, and 324 of those impose some form of property tax.

The average annual property tax was 3,713 kroner in 2023, according to figures from the national data agency Statistics Norway.

READ ALSO: What are the tax rules when you buy and sell property in Norway? 

How is the tax calculated?

Property tax is calculated based on the estimated value of the property. Local authorities can take the figures either from the Norwegian Tax Administration or by estimating the market value itself.

This value will typically be the average property price per square metre in your area multiplied by the size of your dwelling.

The property valuations used to calculate the property tax are normally a couple of years old.

Once the property value has been determined, the taxable value is calculated. The taxable value is the percentage of the property’s value used to determine how much property tax should be levied.

The Norwegian Tax Administration has an online tool where you can calculate the taxable value of your home.

Meanwhile, the Property Tax Act states that the tax value for residences is 70 percent.

Plenty of municipalities in Norway may have a reduction or deduction on residential properties to ensure the tax isn’t too high.

For example, in Oslo, a deduction of up to 4.7 million kroner is given to all homes. These deductions are on the taxable value of your home. This means that it is 70 percent of your home’s value minus the deduction.

If the deduction (if one applies) is greater than the home’s value or tax value, no tax will be charged.

How much will you be charged?

When it comes to individual areas, how the tax is calculated can be quite complicated. This is due to the different tax rates applied by different areas and the potential inclusion of deductions.

Therefore, calculating your property taxes is difficult. For a rough idea, most of Norway’s municipalities share information on how the tax works in that area and any deductions in place.

Some areas will also not charge property tax if the tax bill is below a certain figure. In Oslo, property taxes of less than 300 kroner are waived.

You can follow some of these links to learn more about how property tax is calculated in Oslo, Bergen, Trondheim, Tromsø, Stavanger, and Kristiansand.

For more individual information on where you live, you can either contact your municipality directly or search for where you live, followed by “eiendomsskatt.” Remember to use only the official websites of your local authority, and these websites typically won’t ask you to input any personal information.

When will I be charged?

Once again, how payment is collected depends on where you live. Some areas collect quarterly payments, while others collect monthly payments.

Furthermore, different areas will send out invoices at different times of the year. However, you can expect to see the tax slip in your inbox during the year’s first quarter.

Details on property tax payments, including how much you owe and when payment will need to be made, will be sent to your digital mailbox. The invoice for property tax will also be sent to your online bank or digital mailbox.

If you can’t pay

Your municipality may allow you to defer payment until later, but you will be charged interest on this.

Some areas will also have exceptions, such as if you are unable to pay after a large loss of income due to an accident or illness or an event like a fire that has damaged your home.

Outside of these instances, you can expect the normal debt collection process to happen.

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PROPERTY

Could Norway soften its mortgage requirements?

Norway's mortgage regulations, set by the finance ministry, expire at the end of 2024. Some experts believe the requirements could be made easier in the new year.

Published: 22 August 2024 11:24 CEST
Could Norway soften its mortgage requirements?

The country has a strict set of lending regulations that banks need to account for when offering customers mortgages.

Among these are mortgage applicants only being allowed to borrow the equivalent of five times their income minus any existing debts and a minimum 15 percent deposit on house loans.

Banks can then set their own requirements on top of these minimum requirements. For example, one of Norway’s largest banks, DNB, has previously told The Local that it typically asks foreigners for a 25 percent deposit.

READ MORE: What foreign residents in Norway need to know to get a mortgage

Norway’s latest set of requirements expires at the end of the year, but broadcaster TV 2 reports that they could be softened to make it easier for consumers to obtain mortgages.

The Financial Supervisory Authority of Norway, which supervises banks and other financial institutions, will publish its advice for what the government should do with lending regulations.

TV 2 reports that the Ministry of Finance said the government’s decision on what to do would be published towards Christmas.

Any changes proposed by the government would come into effect from the new year.

Jeanette Fjære-Lindkjenn, a PhD student at the Housing Lab at Oslo Met and who has previously worked as an economist for NB Markets and Norges Bank, told TV 2 that some form of change to the regulations was expected.

“I think it is perhaps more realistic that there could be some kind of softening or more flexibility, which might mean that these costs (of getting a loan) could be a little less,” she told the broadcaster.

Fjære-Lindkjenn said that the introduction of exceptions to the equity requirement for households with good finances would be one possible solution. She said in return, houses with lower equity would initially make larger monthly payments.

Her and others’ research at the Housing Lab at Oslo Met has examined how mortgage regulations affect house prices and debt growth, households’ financial vulnerability, and banks’ losses related to lending.

The research was uncertain whether the current regulations increased financial vulnerability for households.

The current 15 percent requirement could be a double-edged sword, though, Fjære-Lindkjenn said. This is because the 15 percent figure stopped people from taking on bigger loans than they could handle, but on the other hand, the high equity requirement leaves consumers with little in the way of savings after buying a house.

Should the rules be relaxed, Fjære-Lindkjenn expected a short-term and moderate increase in housing prices.

“The research we have now shows that the effect on house prices has appeared to be quite short-lived and moderate. I believe that in the long term, there will be other more important drivers for house prices,” she said.

Norway’s lending regulations were last relaxed in 2022 when the government reduced the interest rate changes applicants would need to tolerate from five percent to three percent.

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