Upward adjustment of input value

If you intend selling a house/apartment, holiday home or plot of land which you owned before 1 January 1992, you can adjust the input value upwards in accordance with certain rules and rates. If the house/apartment, holiday home or plot of land was purchased after this date, the input value cannot be adjusted in this rules.

If the house/apartment, holiday home or plot of land was purchased over a number of years, or improvements were made during 1990 or earlier, each year's incremental increase of the input value must be adjusted upwards separately. For example, if you spent NOK 50,000 on improvements to the dwelling in 1985, you must upwardly adjust this amount by the rate for 1985 and add this value to the input value of the property.

The total input value cannot be adjusted upwardly to an amount that is higher than the sales fee. The amount of upward adjustment therefore cannot result in you being entitled to a deduction for any loss on the sale; it can only reduce or eliminate any gain.

Table for upward adjustment of input value in connection with the calculation of gains or losses upon the sale of a house/apartment, holiday home or plot of land

Year of purchasePercentage rate for upward adjustment of input valueYear of purchasePercentage rate for upward adjustment of input value

1990

3

1967

200

1989

6

1966

210

1988

10

1965

220

1987

16

1964

230

1986

22

1963

240

1985

28

1962

250

1984

36

1961

260

1983

42

1960

270

1982

50

1959

280

1981

60

1958

290

1980

70

1957

300

1979

80

1956

310

1978

90

1955

320

1977

100

1954

330

1976

110

1953

340

1975

120

1952

350

1974

130

1951

360

1973

140

1950

370

1972

150

1949

380

1971

160

1948

390

1970

170

1947

400

1969

180

and earlier

400

1968

190

   

Example

A large plot of land of 100,000m2 was purchased in 1979 for the sum of NOK 400,000. After some year, a plot of 1,000m2 was split off and sold for NOK 40.000.

   

Calculation of the plot's input value:

 

Input value NOK 400,000 x 1/100

NOK 4 000

 

+ Upward adjustment (NOK 4000 x 80%.)

NOK 3 200 

 

= Input value after upward adjustment

NOK 7 200 

 
   

Gain/loss:

 

Sales fee

NOK 40 000

 

– Input value

NOK 7 200

 

= Gain on the sale

NOK 32 800

 

 

 

The gain made on the sale of the plot of NOK 32,800 must be entered in the tax return and will be taxed as general income at the rate of 25 percent from the income year 2016, i.e. NOK 8,200.

Example
In 1979, Ola purchased a house for NOK 500,000. He incurred purchase expenses (document fee, registration fee) of NOK 10,000. In 1985, he also spent NOK 50,000 on improvements to the property. After some year he sold the property for NOK 1,050,000 and incurred NOK 25,000 in expenses for an estate agent, advertising, etc.

   

Purchase sum 1979

NOK 500 000

 

+ Purchase expenses

NOK 10 000

 

= Input value in 1979

NOK 510 000

 
   

Sale price 2008

NOK 1 050 000

 

– Sales expenses

NOK 25 000

 

= Sales fee

NOK 1 025 000

 
   

As the property was purchased before 1991, the input value must be adjusted upwards.

   

Input value for 1979

NOK 510 000

 

+ Upward adjustment*)

NOK 408 000

 
 

NOK 918 000

 
   

+ Improvements in 1985

NOK 50 000

 

+ Upward adjustment of improvements**)

NOK 14 000

 

= Total input value

NOK 982 000

 
   

*) For 1979, the input value must be adjusted upwards by 80 percent. This will lead to the input value being increased by NOK 408,000 (NOK 510,000 x 80 percent).

**) The improvements were carried out in 1985, and the rate for the upward adjustment for this year is 28 percent. This will lead to the input value being increased by NOK 14,000 (NOK 50,000 x 28 percent). Ola has not used the property has his own home during one of the past two years, and the gain is therefore taxable.

   

Taxable gain:

 

Sales fee

NOK 1 025 000

 

– Input value

NOK 982 000

 

= Gain on the sale

NOK 43 000

 
   

The gain of NOK 43,000 must be entered in the tax return for the year of the sale, and taxed as general income at the rate of 25 percent for the income year 2016, i.e. NOK 10,750.

Example
A plot was purchased in 1990 for the sum of NOK 70,000. Work was immediately begun on the plot involving excavations and the construction of foundations. This cost a total of NOK 100,000. The work stopped at the end of 1990. The plot was still in the same state with the foundations still in place when it was sold after some year for NOK 150,000.

   

Calculation of the input value:

Purchase price

NOK 70 000

 

+ Improvements

NOK 100 000

 

= Input value

NOK 170 000

 
   

Gain/loss:

 

Sales price

NOK 150 000

 

– Input value

NOK 170 000

 

= Loss on sale 

NOK 20 000

 

The plot was sold at a loss. The input value can therefore not be upwardly adjusted. The deduction of NOK 20,000 must be entered in the tax return and will reduce the seller's general income. As general income is taxed at the rate of 25 percent from the income year 2016, the seller would have had his tax reduced by NOK 5,000.

When should the gain or loss be entered in the tax return?

Gains or losses on the sale of houses/apartments, holiday homes or plots must be entered in the tax return for the income year in which the property was taken over by the purchaser. This applies even if the purchase sum is paid in full or in part in a different year.