2.8.4 Taxable profit on the sale of housing, land and other real property

Item 2.8.4 Applies to the tax year 2016

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Under this item, you must enter your calculated taxable gains on the sale of real property, such as housing and plots of land. The general rule is that the profit from the sale of real property is taxable, but this will depend on the period of ownership and the period of occupancy. Any loss must be entered under item 3.3.6.

Does this item concern me?

Plots of land

Gains on the sale of plots are always taxable.

Housing

If you have sold a house/apartment with a gain, this will be taxed if you have:

  • used it as your own home for less than 12 out of the last 24 months (period of occupancy)
  • and/or owned the house/apartment for less than one year (period of ownership). The period of ownership is calculated from the date on which you took over the property or began using it or the date on which it was completed, until the date on which you accept an offer for the property.

If there is a hindrance to use (e.g. you are prevented from fulfilling the period of residence requirement due to work, sickness, fire or damage), you can still be credited with non-residential time in relation to the tax rules in connection with the sale of residential property. For more information on the rules concerning the sale of residential property, see here.

Holiday homes

If you have sold a house/apartment with a gain, this will be taxed if you have:

  • used it as your own holiday home for fewer than five out of the last eight months (period of occupancy)
  • and/or owned the holiday home for less than five years (period of ownership). The period of ownership is calculated from the date on which you took over the property or began using it or the date on which it was completed, until the date on which you accept an offer for the property.

Commuter accommodation

Taxpayers who own commuter accommodation in addition to their own residential property can fulfil the period of residence at both homes simultaneously. If you have sold a residential property which you have not used as commuter accommodation or your own home in 12 of the last 24 months and/or owned it for less than one year, the gain will be taxed.

Break-up of relationships

If a joint home is realised in connection with the break-up of a relationship between spouses or spouse-equivalent partners with joint children, the person who moves out will be credited with the occupancy period in the same way as the person who remains in the home.

Several owners

If a house that is sold with a gain is owned by several owners, the gain must be distributed according to the respective joint owners' share of ownership.

Division of the property

If the property has a larger area than is considered to constitute a naturally associated plot, the sale of the property may be considered as the sale of housing/holiday home and plots. Gains on the sale of plots are always taxable.

If the sale concerns a number of free-standing buildings, consideration must be given to whether each building has sufficient affiliation to the dwelling in order to be considered part of the dwelling.

If you have used part of the dwelling as your own home and the rest as a taxable rental dwelling, each part must be considered separately. Gains on the sale of the rental part are taxable. Gains on the sale of the part that you use as your own home will be taxable if you have not used it as a dwelling for 12 of the past 24 months and/or owned it for less than one year.

Abroad

If the property you have sold is situated abroad, you must enter it under item 3.1.11.

How do I enter this in my tax return?

You must fill in the municipality to which the property belongs, the holding number (gårdsnummer), subholding number (bruksnummer) and the calculated gain. You also need to show the calculation by which you came up with the calculated gain. You can use the form for the sale of housing, home or plot Skjema for salg av bolig, fritidsbolig eller tomt RF-1318 (in Norvegian only). The form is not an attachment form in the tax return, and therefore can not be filled directly in altinn. However, you can print the form, scan it in and submit it in the return as an attachment.

Calculating gains on the sale of real property

You can calculate the gain by taking the: 

     output value
-    input value
=   result

If the result is a negative amount, you must enter it under item 3.3.6 as a deduction, but if it is positive, it must be entered under item 2.8.4 as a gain.

Input value

This is the amount you paid for the property when you purchased it, or the value of the property when you inherited it. In addition, you can add certain expenses that are attributable to the purchase and sale of the property, such as:

- estate agent expenses

- improvements (excluding maintenance)

- document charges associated with sale

- registration fees

So:

What you paid for the dwelling/value upon inheritance
     +    expenses
=    input value

If you built the dwelling, the cost price forms the starting point for the input value. This covers both the expenses attributable to construction of the dwelling and the costs of purchasing and preparing the plot for construction. The value of your own work linked to newbuilds or improvements can also be added to the input value. The value of your own work should be set to what it would have cost to have work of the same quality performed by others. The hourly rate for non-tradesmen must generally be set lower than what a tradesman would have charged, e.g to the hourly rate for unskilled labour. The rates can be found on the Norwegian Labour Inspection Authority’s website.

If you inherited the dwelling after 2014, the basis for the input value will be either the testator's input value (in the case of continuity) or the estimated market value at the time you inherited the dwelling (in the case of discontinuity). The market value at the time of inheritance will form the basis for the input value if the testator met the residential and ownership period requirements at the time of inheritance, and the property is a dwelling or holiday property. For more information on discontinuity and continuity, see here. In the case of ordinary farms and forestry, the conditions in Section 9-13 of the Tax Act must be met.

Output value

What you sell the property for.

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Documentation requirements

You do not need to send us any documentation for this, but you must be able to present documentation if we ask for it.

You must be able to present the gain calculation if we ask for it. This also applies to the documentation of purchases, expenses, improvements and expenses.

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