The property's tax value (capital value) is equal to the area of the property multiplied by the price per square metre calculated by Statistics Norway (SSB). However, the Tax Act imposes limits on the tax value (capital value) of residential properties relative to the documented market value.
If the tax value exceeds certain specified percentage rates, the property owner may ask for tax value to be reduced. The Norwegian Tax Administration will not correct this value on its own initiative.
The limits on tax values relative to actual market value differ for primary and secondary dwellings. 'Primary dwelling' means the dwelling where you are permanently resident at the end of the income year. This will generally be your address according to the National Registry as of 31.12. If you own other residential properties, these will be considered secondary dwellings, typically rental properties, commuters residents etc.
In property tax cases where the municipal authority uses the Norwegian Tax Administration’s property values, consideration must be given to the maximum limits which applied to the income year to which the property value is linked.
Example: In the case of property tax assessed in 2017, the property value is obtained from the tax assessment for the 2015 income year. The maximum limits for the 2015 income year must be used as a basis in the event of an appeal against property values in property tax decisions in 2017.
What do I need in order to have the tax value reduced?
If you are able to document that the tax value of your primary dwelling exceeds 30 percent of the property’s market value, you will be entitled to have the tax value reduced.
In the case of secondary dwellings, for the 2016 income year, you will be entitled to have the tax value reduced if you are able to document that the value exceeds 96 percent of the property's market value. (For the property value linked to the 2015 income year, the corresponding maximum limit was 84 percent of the property's market value. This rate is relevant to secondary dwellings on which property tax was assessed in 2017).
The basis for the reduction (valuation, etc.) must date from the period after 1 July of the income year to which the property value is linked.
Example: In order to alter a tax value when submitting the tax return for the 2016 income year, you must be able to document a market value for the property from the period after 1 July 2016. If your request for a reduction in the property value is linked to a property tax decision from the 2017 income year, the taxpayer must be able to provide documentation of the property's market value from the period after 1 July 2015.
"Documentation" means, among other things:
- valuation by a qualified valuer (you will not be entitled to a deduction for your fees for the valuer),
- valuation by an estate agent who is familiar with the district,
- observable market value (the price for which the property or a very similar property in the same area has been sold).
Other documentation will only be required if we ask for it.
When can you ask for the tax value to be reduced?
1. In event of a change to your tax deduction card
If you believe that the estimated tax value is incorrect and that the error will affect the tax deduction for the 2017 income year, you can edit and order a new tax deduction card. State the tax value you believe to be correct. The tax value for primary dwellings must not amount to more than 30 percent of the property's market value. The tax value of secondary dwellings should for the 2017 income year not exceed the dwellings real market value (for the 2016 income year, the tax value should not exceed the market value). You must be able to document the market value if the Norwegian Tax Administration asks you to do so.
2. In the event of a change to the tax return
You can ask for the tax value to be reduced when you submit your tax return. If you ask for a reduction, you must state the market value of the property. In the case of primary dwellings, claims for a new tax value must amount to 30 percent of the documented market value. In the case of secondary dwellings, the tax value must amount to 96 percent (2016) of the market value (the corresponding limits for the 2015 and 2017 income years are 84 percent and 100 percent respectively).
3. In the event of an appeal against your tax assessment
You can also ask for the tax value to be reduced by appealing against your tax settlement. You must do so within six weeks after the tax settlement notice was sent.
4. In the event of an appeal against a residential property value used in a municipal property tax assessment.
You can also ask for the tax value to be reduced by appealing against the basis for a property tax assessment when the municipal authority uses a property value as a basis when assessing property tax. If your appeal against your property tax demand only concerns the property's value, the appeal should be addressed to the Norwegian Tax Administration.
If the Norwegian Tax Administration's property values are used in property tax cases, it will be the property value determined in the assessment for the year before the property tax year which is used as a basis.
Example: Property tax assessed in 2017 will be based on the property's value indicated by the assessment for the 2015 income year.
Appeals against property values in property tax decisions will be treated in the same way as an appeal against the tax value through an ordinary appeal against an assessment.