You’ve purchased or taken over a farm
If you’ve purchased or taken over a farm, you must ensure that the information in your tax deduction card and your tax return is correct.
You must allocate the purchase price/remuneration to the individual assets on the farm, such as residential property, farm buildings, and farmlands.
Short description
The acquisition of a farm usually happens through a purchase, or in connection with a generational change, either as an inheritance, gift, or a combination of gift and purchase (gift in the guise of a sale).
What you need to do
Immediately after the acquisition:
Check that your tax deduction card is correct. For example, if your income is changed, you should update this.
When to submit and how to pay
You must check that the information about the farm and its taxable value are listed in your tax return. You must allocate the purchase price/remuneration among the individual assets on the farm, such as residential property, farm buildings, and farmlands.
You’ll need this to
- state the value of the assets in the business in the accounts and in the business information in the tax return (only if you’re self-employed)
- calculate tax on gains or deductions for losses if you later sell the farm again, or hand it over as a gift or an inheritance
How to distribute the values:
The purchase price/remuneration must be allocated to the individual assets on the farm. Assets belonging to a farm are usually
- residential property(ies)
- agricultural buildings, such as barns, cowsheds, and similar
- farmlands, forests, or plots of land
- milk quotas
In general, the allocation of the purchase price should be the same for buyer and seller.
- If the buyer and seller have allocated the purchase price in the sales contract, this distribution must be used.
- If the purchase price has not been allocated in the contract, it must be allocated to the different assets according to their market value. If you’ve bought the farm at the asking price/valuation, the allocation to the individual assets should be stated in the valuation.
Example: Purchased at valuation
Per purchases a farm for NOK 4,000,000. The market value of the farm is stated like this in the valuation:
|
Residential property (farmhouse) |
NOK 2,000,000 |
|
Barn |
NOK 1,500,000 |
|
Farmlands/forest property |
NOK 500,000 |
If you’ve bought the farm at a different price from the valuation, you must allocate the purchase price to the assets at the same ratio shown by the valuation.
Example: Purchased under valuation
Per purchases a farm for NOK 3,500,000. The valuation was NOK 4,000,000. This means he paid NOK 3,500,000 / 4,000,000 = 87.5 percent of the valuation. He must allocate the values at the same ratio.
|
|
Valuation |
87.5 percent of the valuation |
|
Residential property |
NOK 2,000,000 |
NOK 1,750,000 |
|
Barn |
NOK 1,500,000 |
NOK 1,312,500 |
|
Farmlands/forest property |
NOK 500,000 |
NOK 437,500 |
Example: Purchased above valuation
Per purchases a farm for NOK 4,500,000. The valuation was NOK 4,000,000. This means he paid NOK 4,500,000 / 4,000,000 = 112.5 percent of the valuation. He must allocate the values at the same ratio.
|
|
Valuation |
112.5 percent of the valuation |
|
Residential property |
NOK 2,000,000 |
NOK 2,250,000 |
|
Barn |
NOK 1,500,000 |
NOK 1,687,500 |
|
Farmlands/forest property |
NOK 500,000 |
NOK 562,500 |
If you’ve acquired the farm through inheritance, as a gift, or as a combination of gift and purchase (gift in the guise of a sale), you must allocate the value to the individual assets that were acquired.
How you allocate value to the individual assets depends on whether the farm could have been sold tax free or not at the time of inheritance or acquisition of the farm.
If the farm could have been sold tax free
If the farm could have been sold tax free at the time of your acquisition, you must use 75 percent of the farm’s market value when allocating the value to the individual assets.
Example
Per inherits a farm that fulfils the conditions for tax-free sale at the time of his acquisition. He must then allocate 75 percent of the farm’s market value to the individual assets belonging to the farm.
|
|
Market value |
75 percent of the market value |
|
Residential property |
NOK 3,000,000 |
NOK 2,250,000 |
|
Barn |
NOK 1,000,000 |
NOK 750,000 |
|
Farmlands |
NOK 500,000 |
NOK 375,000 |
If the farm could not have been sold tax free
If the farm could not have been sold tax free at the time of your acquisition, you must use the same value that the assets had for the seller/donor at the time when you were given or inherited the farm. You take over the value that the assets on the farm had for the previous owner when you purchased/acquired the farm.
Even if the sale of the property is taxable, the sale of one’s own residential property or holiday home can be tax free for the seller. If you’re unsure about this, see our guide to selling residential property (in Norwegian only).
Specific information if you
Hvis selger eller giver har borett (kår/føderåd) på gårdsbruket, skal verdien av denne boretten trekkes fra før du fordeler verdien på eiendelene.
Hvis du har arvet gårdsbruket eller overtatt det som gave eller ved gavesalg, og gårdsbruket kunne ha blitt solgt skattefritt, skal du ta utgangspunkt i 75 prosent av markedsverdien. Det vil si at du skal redusere markedsverdien på de ulike eiendelene med 25 prosent før du trekker fra verdien av boretten.
Finne verdi du skal trekke fra
Verdien av boretten finner du i takseringsreglene for året du overtok eiendommen. Verdien skal så ganges med en egen sats (kapitaliseringsfaktor for kår), basert på antatt levetid for den som har borett.
Hvis flere personer har borett, for eksempel begge foreldre, brukes den personen med høyest statistisk gjenværende levetid.
Verdien av boretten for alle år (den kapitaliserte verdien) skal trekkes fra verdien av den boligen som boretten er knyttet til.
Important information
Per inherits a farm from his father, with an agreement that the father can stay on the farm for the rest of his life. The residential property where Per’s father lives has 65 square meters. Per checks the taxation regulation for the year in question and finds the value of the right of occupancy, for example NOK 30,000, for that year.
Per’s father is 75 years old. In the rates for the capitalisation factors for the right of occupancy, Per finds out that he must use a factor of 7.733 for men aged 75 years.
The value of occupancy is thus NOK 30,000 x 7.733 = NOK 231,990. This value must be subtracted from the value of the residential property that the father lives in.
The market value of the farm is NOK 2,000,000. The market value for the residential property is NOK 1,000,000. In addition, there is a barn and farmlands belonging to the farm. Per subtracts the value of the right of occupancy from the market value of the residential property: NOK 1,000,000 - NOK 231,9990 = NOK 768,010.
The value of the residential property is set at NOK 768,010. The value of the other assets, barn, and farmlands, is allocated according to the valuation ratio of these assets.
Hvis verdien av boretten er større enn boligens markedsverdi, settes boligens markedsverdi til 0. Resten av beløpet brukes da til å redusere verdien på de andre eiendelene.
Important information
Kari inherits a farm from her mother, with an agreement that the mother can stay on the farm for the rest of her life. Kari discovers that the rental value for the residential property that her mother lives in is NOK 45,000.
Kari’s mother is 65 years old. Kari finds that the capitalisation factor for women aged 65 years is 13.659. The value of the right of occupancy is thus NOK 45,000 x 13.659 = NOK 614,655
The market value of the farm is NOK 800,000 NOK and is allocated like this:
|
Residential property (farmhouse) |
NOK 500,000 |
|
Barn |
NOK 200,000 |
|
Farmlands/forest property |
NOK 100,000 |
Since the value of the right of occupancy is larger than the market value of the residential property, the market value of the residential property is set to NOK 0. Kari ends up with a difference of NOK 614,655 - NOK 500,000 = NOK 114,655.
She must allocate NOK 114,655 to the other assets. The allocation is like this:
|
Residential property (farmhouse) |
NOK 0 |
|
Barn |
NOK 123,563 |
|
Farmlands/forest property |
NOK 61,782 |
Hvis selger eller giver får andre ytelser, for eksempel produkter fra jordbruket som ved, grønnsaker eller lignende, skal verdien av produktene også tas med når du beregner verdien av boretten.
Supporting documents
You do not need to send us supporting documents now, but you must be able to provide them if we ask you to.
You should keep the following documents as long as you own the property:
- Purchase contract
- Valuation
- An overview of the allocation of values to assets at the time of acquisition
- Capitalisation factor for right of occupancy