Norway: Worked Example of Tax on Rent

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Tax Example: Rent

Non-resident couple's joint monthly rental income1		€1,500	€6,000	€12,000
Annual Rental Income		18,000	72,000	144,000
Less Costs2		(2,400)`	(12,000)	(21,000)
= Taxable Income		1,605	60,000	123,000
Income Tax Rates3
Flat Rate	28%	4,368	16,800	34,440
Income Tax Due		€4,368	€16,800	€34,440
Capital Tax Rates4
Up to NOK400,000	nil	–	–	–
NOK400,000 – NOK1,080,000	0.9%	467	736	736
Over NOK1,080,000	1.1%	–	4,071	9,571
= Capital Tax Due	15%	€467	€4,807	€10,307
Annual Income Tax Due		€4,835	€21,607	€44,747
Tax Due as % of Gross Income		26.86%	30%	31.07%
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on November 15, 2006.

Notes

Grant Thornton Norway is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

¹ The property is jointly owned by husband and wife.

² Estimated values only. The calculations are based on the computation that costs are around €30 per sq. m. On average, the costs vary depending on the property:

• New properties = €24 per sq. m.
• Buildings 15 years or more = €30 per sq. m.
• Older buildings = €36 - €40 per sq. m.

³ Individual taxpayers earning rental income from less than five rental units / properties (flats, houses, etc.) are taxed at 28%. Individual taxpayers owning five rental units or more are considered to be running a business and additional tax will be levied on the income at progressive rates, wherein the maximum rate is 22.7%. Consequently, the total maximum applicable rate in this instance is 50.7%.

⁴ Capital tax is levied at progressive rates on the assessment value of the property. For flats and buildings used for housing purposes, the maximum assessment value will be set at 30% of the market value of the property. In these calculations, the values are set a bit lower than the maximum rate, which is usually the case with assessment values. The assessed values are as follows:

1. €100,000
2. €500,000
3. €1,000,000

The tax bands in the table are for married taxpayers filing jointly. A different set of tax bands apply to individual taxpayers:

• Up to NOK200,000 (0%)
• NOK200,000 – NOK540,000 (0.9%)
• Over NOK540,000 (1.1%)

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