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Local Norway
27-02-2025
- Business
- Local Norway
What taxes do foreign holiday homeowners in Norway pay?
Many dream of a cabin out in nature where they can unwind and focus on the things that matter to them, whether that's being with friends or family or enjoying the great outdoors. Cabins and holiday homes have long been popular with Norwegians. However, a growing number of foreign buyers are falling in love with the dream of a holiday home in Norway. Tone Cecilie Krange, from the holiday cabin division at DNB Eiendom, has told The Local that while it has long been typical for Danes and Swedes to purchase places in Norway, a growing number of foreigners from other European countries were purchasing holiday homes in the Nordic country. So, with a holiday home already representing a fairly substantial outlay – what additional costs should foreign holiday homeowners expect to pay? Whether you live in Norway already and fancy a place in the country or are a non-resident, you will be expected to pay some taxes on your leisure property. 'Wealth in the form of real property in Norway is subject to tax, regardless of whether you reside in Norway or abroad. This also includes any income the property, such as rental income and gain when selling the property,' Cecilie Weydahl Berg, an acting department head at the Norwegian Tax Administration, told The Local. Property tax Local authorities in Norway can levy a property tax on both primary residences and holiday homes. Around 90 percent of local authorities in Norway have chosen to collect property tax. The tax is calculated on your property's estimated value, and there are a couple of ways this value can be determined. 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 paid. The Norwegian Tax Administration has an online tool where you can . Furthermore, local authorities may have a reduction or deduction on residential properties to ensure the tax isn't too high. Sometimes, if the property is below a specific value, no tax is owed. How much you will pay will depend on how the local authority where the property is located calculates and collects the tax. The average annual property tax was 3,713 kroner in 2023, according to figures from the national data agency Statistics Norway. Wealth tax Wealth tax is levied on someone's net wealth, and property counts towards this figure for tax purposes. Individuals whose net wealth is more than 1,760,000 kroner (with that limit being doubled for spouses, registered partners or spouse-equivalent cohabiting partners who are assessed jointly on their joint wealth). The wealth tax rate is between 1 and 1.1 percent of your net wealth. The taxable value of a holiday home is 30 percent of its market value or the cost price for newbuilds. Therefore, if you buy a holiday home for 10,000,000 kroner, only 3,000,000 kroner will be considered taxable. The Norwegian Tax Administration told The Local that those with a limited tax liability in Norway, such as non-residents, can claim a deduction for property-related debt and that this would reduce the basis for wealth tax. Gains and income Financial gains made on holiday homes can be taxed by the Norwegian Tax Administration. Gains on property sales are taxed at 22 percent. However, gains on holiday homes are not taxable if certain conditions are met. One example is if the property was used as a holiday home in five out of the last eight years before it was sold or if the property's sale was agreed upon more than five years after it was purchased and more than five years after it was first used or constructed according to the certificate of completion. If you plan on renting it out, then the income from this could also be considered taxable. The tax administration has an overview of when rental income is taxed on its website. Stamp duty Stamp duty, the tax you pay to the land registry when you buy or take over a property, is referred to as dokumentantavgift in Norway. A rate of 2.5 percent of the property's value will need to pay upon the registration of the deed or declaration of title that transfers ownership to you. This applies to holiday homes, as well as regular homes that don't belong to a housing association.
Local Norway
13-02-2025
- Business
- Local Norway
Why are foreign buyers snapping up Norwegian cabins?
What share of cabin buyers come from abroad? Tone Krange, cabin manager at DNB Eiendom, said that 4.4 percent of cabins, or hytter, sold in Norway in 2024 were sold to foreigners, with the share as high as 6.7 percent in and around the country's ski resorts. In the first month of this year, she said, the percentage of foreign buyers in ski resorts has doubled compared to the first month of 2024. The share of foreign buyers for Norwegian hytter has increased every year since 2020 when only 2 percent of buyers came from abroad. The composition of foreign buyers has also changed, with an increasing share now coming from outside Scandinavia. "Danes and Swedes have long taken their skiing holidays to Norway, but now the proportion of ski tourists from mainland Europe is also increasing, especially the Germans and the Dutch," Krange said. You can see the growing importance of foreign buyers in the graph below. The share of foreign buyers in cabin sales has been steadily increasing since 2020. Graphic: DNB What's behind the growing share of foreign buyers? Cost Krange said that the growing share of foreign buyers followed on from the number of foreigners coming to the Norwegian mountains to ski, primarily on the back of the weak krone, which has turned Norway from an expensive destination to an affordable one. "It's because of the low krone. That's that's the thing that has really boosted it," she said. "For the Swedes and the Danes and the Germans, it has been very expensive to go to the Alps for the last couple of years, and sometimes a little bit out to reach. They get so much more for their money here." "In the Austrian side [of the Alps], the Swiss side and the French side, it's really double what it is here for everything: hotel prices, food prices, the restaurant prices, it's crazy." She said the growing number of foreign skiiers was great for Norwegians who own a hytte in the main resorts, as it meant that they can be rented out non-stop when their owners are away. Snow reliability and better facilities The second factor was the reliability of snow in Norway, which has been drawing more and more foreign skiiers as climate change affects snow cover at Alpine resorts. "The snow conditions have been really bad in a lot of places in the Alps, but the snow conditions in Norway, except actually for right now, have been good. We had a lot of snow in Norway last year." She said that the owners of Norwegian ski resorts have also been investing heavily in new facilities and lifts, meaning the top resorts can increasingly compete with what is on offer in the Alps. Ease of transport The third factor, she said, was improving transport links to Norwegian resorts, with the Scandinavian Mountains Airport in Sälen improving access to Norwegian resorts like Tyrsil, for people to taking charter flights from the UK, The Netherlands or Germany. There are also resorts which you can travel to by rail from Oslo. Investment potential Krange said that some well-off foreign skiers who came to Norway initially on a holiday decided afterwards that the weak krone meant buying a cabin would be a good investment, with foreign buyers able to benefit both from a future recovery in the currency and from the growing popularity of Norway as an international ski destination. "I think several of those who have been here as ski tourists and had a good time in Norway decide that buying a cabin might be a good investment both financially and in terms of experience," she said. "There is also a good rental market at the major destinations, so the cabin can easily be rented out when they are not using it themselves." Rebound in the market Krage said that the interest from foreign buyers was hoping to bring the market for holiday cabins back from the doldrums of recent years. "I think we are slowly but surely approaching a normal market, and an interest rate cut in March will probably help," she said. Last year, the number of cabin sales increased by 6.6 percent compared to 2023, and the median price increased by 4.8 percent. Although it took an average of 116 days to sell a cabin last year, Krange believes it is slowly becoming less of a buyer's market.
