The key Norwegian budget proposals that will affect your finances
Norway has unveiled its state budget for 2024, and while several things will be cheaper, income tax has only seen modest changes, and some everyday products will become more expensive.
The Norwegian state budget for 2024 was revealed by the government on Friday. The government has committed over 1.8 trillion kroner in spending for next year.
It will also tap into its oil fund to the tune of some 400 billion kroner to help pay for its policies, proposals, cuts and funding.
"I know that many notice higher prices and interest rates. This budget will contribute to more security in people's everyday lives - no matter where in the country they live and no matter how old or young they are," Vedum said in a government press release.
READ ALSO: Norway's government boosts use of oil money in 'responsible' budget
Despite only boasting modest income tax cuts for most earners, many changes were announced that will affect everyday finances.
Childcare cost cuts, but support for parents with kids not in kindergarten will be slashed
The government will cut the maximum monthly price for a kindergarten place from 3,000 kroner to 2,000 kroner a month, excluding additional charges such as food. This change will take effect from August 2024.
Families in the 189 most sparsely populated local authorities will see a bigger cut. In these municipalities, a kindergarten place will cost just 1,500 kroner per month.
Those with children who do not use kindergarten will see their support cut. Cash support will be cut off from 19 months. Families with children aged between 13 and 23 months receive support if their children do not attend kindergarten.
The new measure means four months less support for families in this position.
Parental allowance changes
Parents who choose to take 80 percent of parental allowance for 59 weeks rather than 100 percent for 49 weeks will now receive the same amount of support.
Taxes
Income tax will receive relatively minor changes. People with incomes of up to 800,000 kroner will receive a tax relief of between 200 and 600 kroner per year. Those who earn over 1 million kroner will pay around 800 kroner more in tax per year.
The controversial wealth tax will remain mostly unchanged. However, there are changes to how second homes and high-value primary homes are valued.
Social security tax on salary and social security will be reduced to 7.8 percent. The social security tax on business income will also be reduced to 11 percent.
The pension rate will remain unchanged.
Cars and transport
Fuel taxes for petrol and diesel will be increased by 15 øre per litre. The traffic insurance tax being cut by 400 kroner per year will offset this increased cost.
According to the government, one would need to drive more than 40,000 kilometres a year for the increased fuel tax to outweigh decreased insurance tax.
Energy support extended
The electricity subsidy will continue in 2024. From the budget, 9.75 billion kroner has been set aside to pay for it.
The threshold to receive support has been increased slightly. From the beginning of next year, the subsidy will not kick in until the price rises above 73 øre per kilowatt-hour, rather than 70 øre at present.
The state will continue to pay 90 percent of the hourly energy price above 70 øre per kilowatt hour.
Medical treatment to become more expensive.
The deductible for visiting a doctor, psychologist, or outpatient clinic, using patient travel and receiving an x-ray will become 4.35 percent more expensive. However, the threshold for deductible exemption will remain the same. This means that after you have paid more than 3,040 kroner per year in healthcare deductibles, the government pays the rest.
Student support increased
Students will receive 9,000 kroner per year more in support for the 2023-2024 academic year. For the academic year 2024-2025, support will increase by an additional 3.8 percent.
More expensive alcohol and tobacco
Taxes on alcohol and tobacco will increase. The alcohol tax will increase by 3.8 percent. The tax on cigarettes will increase by 4 percent.
Meanwhile, the price of snus will see the biggest increase. Taxes on snus will go up by 4.3 percent.
Tax deductions for workers
The government will increase tax deductions for long-haul drivers and workers who live in barracks. The tax-free part of staying in barracks, boarding houses, and dormitories with cooking facilities will be increased from 250 kroner to 400 kroner.
The cost rate for long-haul drivers will be increased to 400 kroner per day. The mileage rate in the travel tax deduction will be raised from 1.70 kroner to 1.76 kroner. The minimum deductible will also be raised from 14,400 kroner to 14,950 kroner.
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The Norwegian state budget for 2024 was revealed by the government on Friday. The government has committed over 1.8 trillion kroner in spending for next year.
It will also tap into its oil fund to the tune of some 400 billion kroner to help pay for its policies, proposals, cuts and funding.
"I know that many notice higher prices and interest rates. This budget will contribute to more security in people's everyday lives - no matter where in the country they live and no matter how old or young they are," Vedum said in a government press release.
READ ALSO: Norway's government boosts use of oil money in 'responsible' budget
Despite only boasting modest income tax cuts for most earners, many changes were announced that will affect everyday finances.
Childcare cost cuts, but support for parents with kids not in kindergarten will be slashed
The government will cut the maximum monthly price for a kindergarten place from 3,000 kroner to 2,000 kroner a month, excluding additional charges such as food. This change will take effect from August 2024.
Families in the 189 most sparsely populated local authorities will see a bigger cut. In these municipalities, a kindergarten place will cost just 1,500 kroner per month.
Those with children who do not use kindergarten will see their support cut. Cash support will be cut off from 19 months. Families with children aged between 13 and 23 months receive support if their children do not attend kindergarten.
The new measure means four months less support for families in this position.
Parental allowance changes
Parents who choose to take 80 percent of parental allowance for 59 weeks rather than 100 percent for 49 weeks will now receive the same amount of support.
Taxes
Income tax will receive relatively minor changes. People with incomes of up to 800,000 kroner will receive a tax relief of between 200 and 600 kroner per year. Those who earn over 1 million kroner will pay around 800 kroner more in tax per year.
The controversial wealth tax will remain mostly unchanged. However, there are changes to how second homes and high-value primary homes are valued.
Social security tax on salary and social security will be reduced to 7.8 percent. The social security tax on business income will also be reduced to 11 percent.
The pension rate will remain unchanged.
Cars and transport
Fuel taxes for petrol and diesel will be increased by 15 øre per litre. The traffic insurance tax being cut by 400 kroner per year will offset this increased cost.
According to the government, one would need to drive more than 40,000 kilometres a year for the increased fuel tax to outweigh decreased insurance tax.
Energy support extended
The electricity subsidy will continue in 2024. From the budget, 9.75 billion kroner has been set aside to pay for it.
The threshold to receive support has been increased slightly. From the beginning of next year, the subsidy will not kick in until the price rises above 73 øre per kilowatt-hour, rather than 70 øre at present.
The state will continue to pay 90 percent of the hourly energy price above 70 øre per kilowatt hour.
Medical treatment to become more expensive.
The deductible for visiting a doctor, psychologist, or outpatient clinic, using patient travel and receiving an x-ray will become 4.35 percent more expensive. However, the threshold for deductible exemption will remain the same. This means that after you have paid more than 3,040 kroner per year in healthcare deductibles, the government pays the rest.
Student support increased
Students will receive 9,000 kroner per year more in support for the 2023-2024 academic year. For the academic year 2024-2025, support will increase by an additional 3.8 percent.
More expensive alcohol and tobacco
Taxes on alcohol and tobacco will increase. The alcohol tax will increase by 3.8 percent. The tax on cigarettes will increase by 4 percent.
Meanwhile, the price of snus will see the biggest increase. Taxes on snus will go up by 4.3 percent.
Tax deductions for workers
The government will increase tax deductions for long-haul drivers and workers who live in barracks. The tax-free part of staying in barracks, boarding houses, and dormitories with cooking facilities will be increased from 250 kroner to 400 kroner.
The cost rate for long-haul drivers will be increased to 400 kroner per day. The mileage rate in the travel tax deduction will be raised from 1.70 kroner to 1.76 kroner. The minimum deductible will also be raised from 14,400 kroner to 14,950 kroner.
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