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Taxes For Members

How owning property affects wealth tax in Norway

Frazer Norwell
Frazer Norwell - [email protected]
How owning property affects wealth tax in Norway
This is how Norway's wealth tax works in relation to property. Pictured is a block of flats in Norway. Photo by Anastasiya Dalenka on Unsplash

Norway has a wealth tax system in place which doesn't just apply to the super-rich. Owning property is taken into wealth tax calculations, so how does this work?

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Wealth tax is just one of the several taxes you may need to pay if living and working in Norway.

Norway's wealth tax is levied against one's net worth. This is the total value of your assets minus any debts or liabilities.

The municipal wealth tax rate in the country amounts to 0.7 percent, and it is calculated based on your assets exceeding a net capital tax basis of 1.7 million kroner for single or unmarried taxpayers and 3.4 million kroner for married couples in Norway.

Along with the municipal wealth tax, there is also a state wealth tax rate. This tax amounts to 0.3 percent and is calculated based on your assets exceeding a net capital tax basis of 1.7 million kroner if you're single or unmarried or 3.4 million kroner for married couples.

Those with a net value of more 20 million kroner (or 40 million kroner for married couples), pay a rate of 0.4 percent. 

Given the average price of a home in Norway is currently around 4.6 million kroner, owning property can, in theory, leave you liable to pay wealth tax.

Thankfully for many, there are some special rules for wealth tax and property. For starters, your primary dwelling is valued at 25 percent of its estimated market value. If the homeowner has a mortgage, then this will also be deducted from the property's value.

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

These discounts on valuation also appear automatically, so you don't need to submit them manually when working out wealth tax. As an example, a 6 million kroner house would only be worth 1.5 million kroner in wealth tax terms if it's your primary property and you have paid off your mortgage.

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The exception to this valuation discount is if you own a property worth more than 10 million kroner. Ten million of the property's value will be discounted at 75 percent, with any of the value over this only receiving only a 30 percent valuation discount.

One thing worth remembering is that the valuation discount doesn't apply to other property types. If you own a second home, this will be valued at its full market price, with the mortgage deducted.

Property owned abroad also counts towards Norwegian wealth tax as the country taxes on global income and assets. This applies to both property you have bought and inherited.

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Comments (1)

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Debbie Graham 2023/06/27 15:50
How do they valuate property outside of the country?
  • Anonymous 2023/06/29 15:18
    Hello, we will put together an article on this topic! best regards, Frazer

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