Tax on the letting of housing/holiday homes

Income from the letting of housing/holiday homes generally constitutes taxable income, but there are a few exceptions. Any profit will be taxed as capital income (general income) at the rate of 24 percent in 2017. If the rental activity is considered to be an enterprise, the income must be taxed as business income, which means that the rental income will be subject to employer’s National Insurance contributions and steptax, in addition to ordinary income tax.

Housing for which rental income is tax-free is referred to as ‘tax-exempt housing’. While housing for which rental income is considered to be taxable is referred to as ‘accounts-based housing’.

Tax exemption for personal use

If you own housing or a holiday home, you will not be taxed on the value of using the property either entirely or partly for your own purposes. The tax exemption applies to: 

  • residential properties, such as detached houses, semi-detached and multi-unit houses, terraced houses and apartments
  • holiday homes
  • housing units in a housing cooperative
  • farmhouses on farms

When is rental income tax-free?

Rental income from housing is tax-free when:

  • you use at least half of the property as your own home, calculated according to rental value.
  • all or a high proportion of the housing is let for up to NOK 20,000 during the income year.

Rental income from a multi-unit house is always taxable.

In the case of a holiday home which you use entirely or partly for holiday purposes, rental income up to NOK 10,000 will be tax-free. Of any excess amount, 85 percent will be considered taxable income. It is a condition that the owner uses the property to a reasonable extent over time. If the abovementioned condition concerning period of use is not met, the property will be considered a rental cabin. “Rental cabin” means a holiday property intended for letting which will not be used by the owner. If the property is considered to be a rental cabin, it will be subject to accounts-based assessment.

What does “using at least half of the property” mean?

The rental value of the part of the property which you use is equal to or greater than the rental value of the part of the property that is let. Rental income will therefore be tax-free even if up to 50 percent of the property is let (calculated according to rental value).

What does “letting all or a high proportion of the property” mean?


A “high proportion” means that the rental value of the part you let is greater than the rental value of the part you use as your own home. If all or a high proportion of the property is let for more than NOK 20,000, the property must be subject to accounts-based assessment and all the rental income from the property will be taxable.

When determining whether or not the limit for tax liability of NOK 20,000 has been exceeded, only rental income you receive from letting all or a high proportion of the property should be included. However, if the threshold of NOK 20,000 is exceeded, the housing will be subject to accounts-based assessment for the whole year. This means that any rental income relating to a period during which the property was only let to a limited extent will also be taxable.

What does “rental value” mean?

“Rental value” means the value of the residential property on the open rental market for the purposes for which the let area is used. The difference between the rental value of the let part and your own part will not necessarily correspond to the ratio between the floor areas of the two units, although they are often the same.

The rental value calculation can vary depending on the type of letting concerned, e.g. short-term letting versus letting on a more permanent basis. In the case of short-term rental, it is the rental value in connection with such letting that must be used in connection with the comparison between the rental value of the let part and the area which you use for your own purposes. If the let area is exclusively used for short-term rental, it may be appropriate to also determine a stipulated rental value for periods when the property is not being let, based on the income from the short-term rental, which may therefore exceed the actual rental income. Read more about the sharing economy.