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Norway fact sheets on real estate property
Buying and owning Property in Norway
Approval /Concession
Anybody intending to buy real estate in Norway will have to first apply for approval or concession to be granted by the local authority where the property is located. Major exemptions from that duty have been introduced, the more important of which relate to:
?Wholly owned units and shares in housing co-operatives.
?Built-on land of a size not exceeding 100 decares (when not more than 20 decares are fully cultivated).
?Individual sites not built on, for residential or holiday houses, provided the size does not exceed 2 decares.
Persons residing abroad are required to apply for a concession to acquire holiday property, except when acquired from close relatives. You will not be deemed to be residing abroad if you have a permanent residence in Norway or have had a permanent residence in Norway for a minimum of five years. In that case no concession is required.
Business entities are not deemed to be residing abroad provided their head office, their place of business or some other domicile is in Norway, except when a person or persons without a permanent residence in this country may hold a controlling interest in the entity.
Categories of property
Residential property in Norway falls into three main categories:
?Detached/Semi-detached, either on a freehold site or on leased ground
?Unit in a condominium
?Unit in a housing cooperative
Each category is regulated by separate legislation. None of it is so far available in English.
Commercial property exists largely as individual buildings or as units in commonhold.
Employing a real estate agent
Practically all sale of real property in Norway is handled by government authorised estate agents or is done through lawyers. The estate agent/lawyer is in charge of the settlement and shall ensure that the buyer receives the officially registered title deeds, free of encumbrances, in return for the settlement paid to the seller. It is the seller who defrays the expenses of the estate agent. The estate agent will also arrange for applications to be made for a concession if and when required, will draft the contract for the purchase and sale, and otherwise obtain all the requisite information and details. It is not necessary to involve a lawyer in addition to the estate agent in order to conclude the purchase and sale. Estate agents and their business are regulated under specific legislation
Regulation by law of sale (transfer) of real estate
Relations between the buyer and the seller are regulated under a specific Act relating to the sale (transfer) of real property. This Act is mandatory when the buyer is a consumer, yet leaves room for being contracted out of by and between professional parties.
Costs involved in buying real property
Over and above the expenses of the estate agent, which are to be paid by the seller, any purchase of real property (except for a unit in a housing co-operative) is subject to a documentary charge of 2.5 per cent of the sales amount. That charge is payable by the buyer. In addition there is the charge for having the title deeds officially registered as well as any mortgage bonds for security. These charges are also payable by the buyer. In an ordinary purchase and sale those expenses will generally amount to around 400 Euro.
Taxation on real estate property
Income tax
There is a 28 per cent tax on net income from immovable property. If the owner is the same as the occupier, the tax authorities will add an capital income to his tax base. The net tax on capital income is 28 per cent. This tax wil probably be removed in 2005.
Local property tax
Some local authorities may add a local property tax on houses. The maximum tax is 0,7 per cent of a taxbase. The tax base may vary from 90 per cent of the market value to as low as 10 per cent of the market value.
Capital gains tax
On capital gains and yields, the tax rate is 28 per cent. If the owner is the same as the occupier and he has been occupying the dwelling for at least one of the last two years, there is no capital gains tax.
V.A.T.
V.A.T. is only on new buildings, not on land transfers or rents. V.A.T. may voluntarily be imposed on commercial rents if the renter is paying V.A.T.
Approval /Concession
Anybody intending to buy real estate in Norway will have to first apply for approval or concession to be granted by the local authority where the property is located. Major exemptions from that duty have been introduced, the more important of which relate to:
?Wholly owned units and shares in housing co-operatives.
?Built-on land of a size not exceeding 100 decares (when not more than 20 decares are fully cultivated).
?Individual sites not built on, for residential or holiday houses, provided the size does not exceed 2 decares.
Persons residing abroad are required to apply for a concession to acquire holiday property, except when acquired from close relatives. You will not be deemed to be residing abroad if you have a permanent residence in Norway or have had a permanent residence in Norway for a minimum of five years. In that case no concession is required.
Business entities are not deemed to be residing abroad provided their head office, their place of business or some other domicile is in Norway, except when a person or persons without a permanent residence in this country may hold a controlling interest in the entity.
Categories of property
Residential property in Norway falls into three main categories:
?Detached/Semi-detached, either on a freehold site or on leased ground
?Unit in a condominium
?Unit in a housing cooperative
Each category is regulated by separate legislation. None of it is so far available in English.
Commercial property exists largely as individual buildings or as units in commonhold.
Employing a real estate agent
Practically all sale of real property in Norway is handled by government authorised estate agents or is done through lawyers. The estate agent/lawyer is in charge of the settlement and shall ensure that the buyer receives the officially registered title deeds, free of encumbrances, in return for the settlement paid to the seller. It is the seller who defrays the expenses of the estate agent. The estate agent will also arrange for applications to be made for a concession if and when required, will draft the contract for the purchase and sale, and otherwise obtain all the requisite information and details. It is not necessary to involve a lawyer in addition to the estate agent in order to conclude the purchase and sale. Estate agents and their business are regulated under specific legislation
Regulation by law of sale (transfer) of real estate
Relations between the buyer and the seller are regulated under a specific Act relating to the sale (transfer) of real property. This Act is mandatory when the buyer is a consumer, yet leaves room for being contracted out of by and between professional parties.
Costs involved in buying real property
Over and above the expenses of the estate agent, which are to be paid by the seller, any purchase of real property (except for a unit in a housing co-operative) is subject to a documentary charge of 2.5 per cent of the sales amount. That charge is payable by the buyer. In addition there is the charge for having the title deeds officially registered as well as any mortgage bonds for security. These charges are also payable by the buyer. In an ordinary purchase and sale those expenses will generally amount to around 400 Euro.
Taxation on real estate property
Income tax
There is a 28 per cent tax on net income from immovable property. If the owner is the same as the occupier, the tax authorities will add an capital income to his tax base. The net tax on capital income is 28 per cent. This tax wil probably be removed in 2005.
Local property tax
Some local authorities may add a local property tax on houses. The maximum tax is 0,7 per cent of a taxbase. The tax base may vary from 90 per cent of the market value to as low as 10 per cent of the market value.
Capital gains tax
On capital gains and yields, the tax rate is 28 per cent. If the owner is the same as the occupier and he has been occupying the dwelling for at least one of the last two years, there is no capital gains tax.
V.A.T.
V.A.T. is only on new buildings, not on land transfers or rents. V.A.T. may voluntarily be imposed on commercial rents if the renter is paying V.A.T.
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