Property abroad

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Property, rental income and gains made on the sale of real property abroad are, in principle, liable to tax in Norway. Losses made on the sale of real property abroad give entitlement to a deduction if a gain would have been taxable. This also applies to shares in holiday complexes (timeshares) abroad and shares in foreign timeshare companies when they are deemed to be real property.

The obligation to pay tax to Norway is limited under some of the tax treaties that have been established with other countries.

What do I have to do?

In the tax return, you must declare your capital and income on property abroad. You must also state the country in which the property is situated. You must do this regardless of whether or not the capital and income are taxable. It is generally also possible to claim a deduction for Norwegian and foreign debt and interest on debt in Norway. Find more information about foreign debt and interest on debt.

Capital/Tax value

Capital in real property abroad is in principle liable to tax in Norway. However, the property may be exempt from any wealth tax obligation under the tax treaty with the country in which the property is situated. You must provide information on all capital in real property abroad (country, land registry number, date of purchase, cost price, etc.). 

The tax value of real property abroad must be determined in accordance with Norwegian rules. Properties abroad and holiday homes in Norway are valued at a maximum of 30% of their market value. Previous percentage-based adjustments to tax values from previous years are shown below. These adjustments are relevant if you have owned the property for a number of years. 

Example 

A property was purchased in 2009 for the sum of NOK 1,000,000. The calculated tax value for 2009 may not exceed NOK 300,000 (30% of NOK 1,000,000). For 2010, the tax value is increased to NOK 330,000 (+10%). For 2011, the tax value is unchanged at NOK 330,000. For 2012, the tax value is increased to NOK 363,000 (+10%).

Year Increase/reduction Year Increase/reduction

2015

0%    

2014

10% 2004 0%

2013

0% 2003 -5%
2012 10% 2002 0%
2011 0% 2001 15%
2010 10% 2000 10%
2009 10% 1999 0%
2008 10% 1998 5%
2007 10% 1997 0%
2006 25% 1996 0%
2005 0% 1995 10%

Income from real property abroad

Income from real property abroad is in principle liable to tax in Norway. However, the income may be exempt from any tax obligation under the tax treaty with the country in which the property is situated. 

If income from real property abroad is liable to tax in Norway, the income must be stipulated pursuant to Norwegian rules. Your personal use of a house/apartment/holiday home abroad will be tax-exempt in the same way as if the property had been situated in Norway. If you have taxable rental income from real property abroad, you must fill in and submit form “Letting etc. of real property”  (RF 1189). Special rules apply to forestry and agricultural properties.

If income from real property is taxable in Norway, you can claim a deduction in your Norwegian tax for the foreign tax on the income. If you are claiming a deduction for foreign tax, you must document that you have paid tax abroad.

You must also fill in and enclose the form "Deduction for tax paid abroad by a person" (RF-1147E).

Gains and losses on the sale etc. of real property abroad

In principle, gains and losses on the realisation of real property abroad are taxable or deductible in Norway. Gains and losses are tax-free if you have owned the property for more than 12 months and during your period of ownership you have used it as your own home for at least 12 of the 24 months leading up to the sale. Gains made on the sale of a holiday home are tax-free when you have used the property as your own holiday home for at least five of the past eight years and it was sold more than five years after it was purchased. Any gain may also be exempt from any tax obligation under the tax treaty with the country in which the property is situated.

When a gain would be tax-free under national law or an applicable tax treaty, the loss will not be deductible.When a gain made upon realisation of real property is taxable in Norway, the gain or loss is determined in accordance with Norwegian rules. You must provide information about the property and how you calculated the gain or loss. 

If the gain is taxable in Norway, you can claim a deduction from your Norwegian tax for the foreign tax on the gain. If you are claiming a deduction for foreign tax, you must document that you have paid the tax abroad.

You must also fill in and enclose the form "Deduction for tax paid abroad by a person" (RF-1147E).

When the capital or income is not taxed in Norway

When your property is located in a country with which Norway has established a tax treaty which states that double taxation is to be avoided through the "distribution method", the capital and income from the property will not be taxed in Norway.As the capital and income will not be taxed in Norway, you will also not be entitled to a full deduction for all your debt and interest on debt. Debt and interest on debt will be limited to the share that is proportionate to your capital that is taxed in Norway. The reduction will be performed using the following formula:

total debt or interest on debt x taxable capital in Norway (without property abroad)


                                    total gross capital in Norway and abroad

 Countries with which Norway has established a tax treaty

The situation applying to each country is presented in the list below. If the country is not shown in the list, you will be taxed on the capital and income from the property and you will receive a full deduction for all Norwegian debt and interest on debt.

  • Barbados: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Belgium: Capital and income will not be taxed in Norway. No full deduction will be given for debt. If you only own housing or a holiday home in Belgium, a full deduction will be given for interest on debt, but not for anything else.
  • Benin: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Bonaire:
    Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Bosnia-Herzegovina: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Brazil: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Curacao:
    Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Egypt: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction will be given for interest on debt, but a full deduction will be given for debt. 
  • Côte d’Ivoire (Ivory Coast): Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction will be given for interest on debt, but a full deduction will be given for debt.
  • Philippines: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.  
  • Indonesia: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt. 
  • Israel: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Italy: Capital and income will not be taxed in Norway. No full deduction will be given for debt. If you only own housing or a holiday home in Italy, a full deduction will be given for interest on debt, but not for anything else.
  • Jamaica: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction will be given for interest on debt, but a full deduction will be given for debt. 
  • Kenya: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.  
  • China: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.  
  • Croatia: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.If you only own housing or a holiday home in Italy, a full deduction will be given for interest on debt, but not for anything else. 
  • Malaysia: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction is given for interest on debt, but a full deduction will be given for debt.
  • Morocco: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt. 
  • Mexico: The capital value of the property will not be taxed in Norway, but the income will be taxed. No full deduction will be given for debt, but such a deduction will be given for interest on debt. 
  • Montenegro: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt. 
  • Pakistan: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction is given for interest on debt, but a full deduction will be given for debt.
  • Saba:
    Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt. 
  • Sri Lanka: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.  
  • St.Maarten:
    Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt. 
  • St.Eustasius:
    Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt. 
  • South Korea: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction is given for interest on debt, but a full deduction will be given for debt.   
  • Trinidad and Tobago: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction is given for interest on debt, but a full deduction will be given for debt.
  • Tunisia: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.  
  • USA:
    Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.
  • Zambia: Income from property will not be taxed in Norway, but the capital will be taxed. No full deduction will be given for interest on debt, but a full deduction will be given for debt.
  • Zimbabwe: Capital and income will not be taxed in Norway. No full deduction will be given for debt and interest on debt.

 

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