How to calculate tax for multi-unit buildings

This article explains how you calculate the tax value for a multi-unit building.

You enter this tax value as a residential property asset in your tax return or business return.

What is a multi-unit building?

A multi-unit building is a residential property with five or more housing units that are not sub-divided into sections. You can use form RF-1297 "Information on multi-unit residential buildings", to provide information on residential property that is considered a multi-unit residential building.

By “housing unit”, we mean a residential unit with its own unit number (previously called dwelling number). This applies to housing units with a separate entrance, and with access to water and a toilet without having to pass through another residential property. In this regard, commercial area that is a part of a residential property can sometimes be considered a housing unit. The condition for this is that the commercial area is suitable for residential purposes, and that it has a separate entrance, access to water and a toilet, etc. The area used for commercial purposes can be considered a housing unit if it can easily be made useable as a residence.

For instance, a building with five units that are not sub-divided into sections (three traditional housing units and two commercial units) could be considered a multi-unit building according to the regulations for tax valuation of residential properties. The condition is that all the units are considered housing units.

Multi-unit buildings are not valued in the same way as other residential properties. 

If some of the units have been sub-divided into sections, then the value of these should not be included in the basis for valuing the multi-unit building. Each section is treated as a separate residential property. The tax value should be determined for each unit that has been sub-divided into a section.

What about buildings with both residential and commercial sections?

It must be determined whether buildings with areas that are used for both housing and commercial purposes should be valued as a residential property or a commercial property. If the area used for residential purposes is more than half of the building’s usable floor space, then the property must be valued using the rules for residential properties.

If the commercial area is larger, then the property is to be valued as a commercial property and you must submit form RF-1098 Formue av næringseiendom (Tax value of commercial property – in Norwegian only).

How to valuate a multi-unit building

The tax value of this type of residential property is calculated by determining the value of each housing unit as if it was a separate residential property. The tax value of the residential property is therefore the sum of the calculated values of all the housing units. If you, the owner, use one of the housing units as your permanent residence, then you must use the square metre rate for primary dwellings for this unit. For the other housing units you must use the square metre rate for secondary dwellings.

If the multi-unit building includes a commercial part, a tax value must be calculated for this unit insofar it can be characterised as a housing unit (if the commercial part is suitable for residential purposes and has its own entrance, access to water and a toilet, etc.). This means that tax value must be calculated for the commercial unit based on square footage with primary area (P-rom) and according to the square metre rate for secondary dwellings. If a housing unit is set up as a hairdressing salon, shop or similar, the primary area of this unit must be calculated and taken into consideration when calculating the tax value of the entire building. Commercial area that cannot be considered a housing unit should not be included in the basis when valuating the building.

How to do the calculation

You can use the housing calculator to calculate the value of each housing unit:

Start the housing calculator

Tick the box for primary dwelling for the housing unit that is used by the owner as permanent residence at the end of the income year. You must specify other housing units, including commercial areas that can be considered a housing unit, as secondary dwellings in the housing calculator. You must include more information in the calculator to calculate the tax value.

The tax value of the multi-unit building is the sum of the calculated values of all the housing units.

How to report

Housing information, including tax value, must be specified either under