Tax rules for short-term letting of homes and holiday homes
From the 2018 income year, separate rules apply to so-called short-term letting of your own home. If you let your own home for less than 30 days, the income is taxable under the standard method. (Under this method, rental income up to NOK 10,000 is tax-free. Of the surplus, 85 percent is considered taxable income.)
By rental income in this regard, we mean the fee paid to you as rent. In addition, any other payments for simple additional services that you agree on and that are closely related to the rent, such as the final cleaning, electricity bills, firewood etc., are treated as part of the rent.
If you let the property via a letting agency/booking firm that charges a fee for their services, you must pay tax on the amount before deducting the fee.
The 30-day limit applies to each individual letting.
With regards to short-term letting of holiday homes and residential properties you no longer use or live in, the tax rules remain the same. This means that this form of short-term letting, for instance via Airbnb, falls under the same tax rules as the more traditional long-term letting of property.
Marte Kirkerud lets out her apartment via Airbnb during several long weekends during a year. In total, the lessees pay NOK 21 060, NOK 18,000 in rent and NOK 3 060 in "guest service fee".
Airbnb charges around 20 percent of the agreed-upon rent as payment for their services, 3 percent of which is charged to the host ("host service fee"). The host service fee amounts to NOK 540. The rest is charged to the lessee in the form of a “guest service fee". After deducting Airbnb’s “host service fee”, Marte is left with NOK 17,460.
When calculating the taxable income, you must use the gross amount. That means the agreed-upon rent before you deduct the letting agency’s fee (“host service fee”). The “guest service fee" is not included in the calculation.
|
Total income |
NOK 18,000 |
|
Tax-free income |
NOK 10,000 |
|
Total |
NOK 8,000 |
Taxable income:
85 percent of NOK 8,000 = NOK 6,800
Peter Ås lets out his home for three weeks while he’s on summer holiday. The agreed-upon rent is NOK 20,000. In addition, the lessees pay Peter NOK 1,000 to be able to use his mountain and road bike cycles. The payment to use the bike cycles is considered so closely linked to the rent that it must be considered part of the total rent.
|
Total income |
NOK 21,000 |
|
Tax-free income |
NOK 10,000 |
|
Total |
NOK 11,000 |
Taxable income:
85 percent of NOK 11,000 = NOK 9,350
Taxation of the different dwellings and holiday properties
Below you'll find information about the taxation of short-term letting and the threshold for busin.
If you let your entire home and the letting period lasts less than 30 days, the rental income is tax liable in accordance with a standard method.
This means that rental income up to NOK 10,000 per year is tax-free. The threshold of NOK 10,000 applies to the house for the entire income year, and not per letting.
85 percent of any excess amount will be considered tax liable income.
As a general rule, any profit will be taxed as capital income at the rate of 22 percent. However, you can't deduct costs related to the letting even if part of the rental income is tax liable.
A limit must also be drawn for letting activity of such an extent that it's considered a business activity, at a tax rate of up to 50.6 percent.
Whether the letting is considered a business activity or not, depends on an overall assessment that is based on the scope and frequency of the letting, among other things. Usually, for the letting to be assessed as a business activity, you have to have frequent lettings.
For letting that last at least 30 days, see how your income should be taxed.
Contact us if you're unsure how your income should be taxed.
If you let part of your home and the letting period lasts less than 30 days, the rental income is tax liable in accordance with a standard method. This means that rental income up to NOK 10,000 per year is tax-free. The threshold of NOK 10,000 applies to the house for the entire income year, and not per letting.
85 percent of any excess amount will be considered tax liable income.
As a general rule, any profit will be taxed as capital income at the rate of 22 percent. However, you can't deduct costs related to the letting even if part of the rental income is tax liable.
A limit must also be drawn for letting activity of such an extent that it's considered a business activity, at a tax rate of up to 50.6 percent in 2019.
Whether or not the letting is considered a business activity depends on an overall assessment that is based on the scope and frequency of the letting, among other things. Usually, for the letting to be assessed as a business activity, you have to have frequent lets.
For letting that last at least 30 days, see how your income should be taxed.
Contact us if you're unsure how your income should be taxed.
There are no special rules for short-term letting of your own holiday homes. These are the usual rules for rental of your own holiday home.
It means that a holiday home which you also use for leisure purposes to a reasonable extent, rental income up to NOK 10,000 per year will be tax-free. 85% of any excess amount will be considered tax liable income.
Read more about the letting of holiday homes in Norway
Read more about the letting of holiday homes abroad
Contact us if you're unsure how your income should be taxed.
Income from the letting of other dwellings/holiday properties that you don't live in or use yourself will generally be tax liable from the first krone. There are no special rules for short-term letting of such properties.
Any profit will be taxed as capital income at the rate of 22 percent. Correspondingly, any deficit will be deductible.
However, it isn't necessarily always the case that rental income is taxed as capital income. In some cases, rental income can be taxed as business income, at a tax rate of up to 50,6 percent.
Whether or not the letting is considered a business activity depends on an overall assessment that's based on the scope, frequency and duration of the letting, among other things. Usually, for the letting to be assessed as a business activity, you have several rental properties and/or frequent lettings.
The "Am I self-employed?" wizard is available here.
See the binding advance ruling (BFU 6/16) in which the Directorate of Taxes concluded that continuous short-term letting of two apartments constituted a business activity for tax purposes.
The level of activity will often be high, particularly in the case of short-term letting, with the result that business activity may be deemed to take place even if only one housing unit is being let.
Contact us if you're unsure how your income should be taxed.