Norway Property Tax Guide (Eiendomsskatt)

Municipal Property Tax (Eiendomsskatt) — Rates 0.2–0.7%

• Municipal discretion: Eiendomsskatt is optional — each municipality decides whether to impose it, on which properties, and at what rate. Approximately 60–70% of Norwegian municipalities levy eiendomsskatt. Some municipalities tax only commercial/industrial properties, others also tax residential properties. The tax is a local revenue source for schools, roads, and municipal services.
• Rate range: Municipalities set a rate between 0.2% and 0.7% of the assessed property value (formuesverdi). The rate can vary by property type — many municipalities apply a lower rate (e.g., 0.2–0.4%) for residential properties and a higher rate (0.5–0.7%) for commercial/industrial properties. New residential developments may receive a temporary exemption (e.g., 5–10 years) in some municipalities.
• Primary residence discount: Municipalities may apply a reduced rate or a higher deduction (bunnfradrag) for primary residences. Typically, primary residences benefit from a minimum deduction of approximately NOK 100,000–300,000 off the assessed value before the tax is calculated. The exact deduction varies by municipality.
• Assessment basis (formuesverdi): The property's assessed value is set by Skatteetaten's valuation model, which estimates market value based on: location, size (square metres), construction year, standard/facilities, and recent sales in the area. The formuesverdi is typically well below market value — for primary residences, the formuesverdi is approximately 25% of market value (aligned with the wealth tax valuation). For secondary homes, it is approximately 90% of market value.

Mortgage Interest Deduction

• Deductibility: Mortgage interest on loans secured against a property (including primary residence, secondary home, and rental properties) is fully deductible from alminnelig inntekt at the taxpayer's marginal rate. For most taxpayers, this means a 22% tax benefit on interest paid (the rate of ordinary income tax).
• Scope: Interest on the first mortgage (purchase loan) and any home equity loan (refinancing, home improvement) is deductible. The loan must be secured by a mortgage (pant) registered with the Norwegian Mapping Authority (Kartverket). Interest on unsecured personal loans used for property purchase may sometimes be deductible if the funds demonstrably finance the property.
• Calculation example: A homeowner with a NOK 2 million mortgage at 5.5% annual interest pays NOK 110,000 in interest. At 22% tax deduction, the net interest cost after tax is: NOK 110,000 − (NOK 110,000 × 22%) = NOK 85,800. The effective interest rate after tax deduction is 4.29%.
• Formuesverdi vs mortgage for wealth tax: Since primary residences are included at only 25% of market value for wealth tax (formuesskatt) but the full mortgage is deductible, homeowners often use this leverage to reduce their net wealth tax. See our Wealth Tax Guide → for details.

Rental Property Taxation

• Rental income: Gross rental income from letting property (boligutleie) is taxed as ordinary income (alminnelig inntekt) at 22%. No trinnskatt (bracket tax) applies to rental income — it is capital income, not personal income.
• Allowable deductions: Interest on mortgage debt for the rental property, maintenance and repairs, property management fees, insurance, municipal taxes (eiendomsskatt), and depreciation (avskrivning) on the building at 2% declining balance (not on the land). Operating expenses directly related to the rental activity are fully deductible.
• Simplified deduction: For short-term rentals (e.g., through Airbnb, Finn.no), a simplified standard deduction of NOK 10,000 plus 15% of gross rental income applies automatically when the property is rented for less than 30 consecutive days per tenant. The taxpayer may choose actual expenses if more beneficial.
• Sale of rental property: Gains on the sale of rental property are taxed as capital gains at 22%. The gain is calculated as sale price minus the tax-determined cost basis (historisk kostpris adjusted for tax depreciation claimed). See our Capital Gains Tax Guide → for details.

Document Duty (Dokumentavgift)

• Rate: A one-time 2.5% stamp duty (dokumentavgift) applies on the purchase price of real estate (fast eiendom). The duty is paid by the buyer when registering the title deed (skjøte) with the Norwegian Mapping Authority (Kartverket).
• Exemptions: The duty does not apply to the purchase of newly constructed buildings (directly from a developer who has not occupied the building), apartment units in housing cooperatives (borettslagsandeler), or transfers between close family members (inheritance, gifts).
• Calculation example: Buying a house for NOK 5 million: dokumentavgift = NOK 5,000,000 × 2.5% = NOK 125,000. This is in addition to the property price and any real estate agent commission.

For wealth tax on real estate holdings, see our Wealth Tax Guide →. For capital gains tax on property sales, see our Capital Gains Tax Guide →. For the taxation of rental income as capital income, see our Investment Income Guide →.