BSU - Young people's housing savings
BSU is a form of saving for people under the age of 34. You can save up to NOK 25,000 per year and you can deduct up to NOK 5,000 per year from your tax. The total savings amount is NOK 300,000.
From 2021, only individuals who do not own residential property will receive a tax deduction as a result of saving in a BSU account. The savings amount is increased to NOK 27,500 from 2021. New regulations relating to this provision in the Taxation Act will be issued at the beginning of 2021.
Who is eligible to save
You can save in a BSU account and claim tax deductions up to and including the income year in which you reach the age of 33. There is no lower age limit for setting up a BSU account, but you can only claim tax deductions once you start earning an income. You are advised not to open a BSU account if you are under 17 and do not receive taxable employment income.
The savings contract
BSU accounts can only be set up once for each person. You enter into the contract with your bank or other savings institution. You cannot have two BSU accounts or set up a new BSU account once a previous account has been settled. You can transfer your BSU account from one approved savings institution (such as a bank) to another if the balance is transferred directly between the savings institutions.
Maximum annual savings amount and how long you can continue saving for
You cannot save more than NOK 25,000 per year. From 2021, the amount will be NOK 27,500. The total savings amount deposited in the account cannot exceed NOK 300,000. If the amount deposited exceeds the maximum amount, the surplus amount will be returned to you.
Interest on the savings cannot be used as part of the annual savings amount. Interest is also not taken into account when calculating the maximum savings amount. Interest cannot be withdrawn until the savings are used to purchase a property. However, you can withdraw interest which accrues from the income year in which you reach the age of 34.
You do not have to save every year. There is also no limit on the number of savings years, but you cannot continue saving once you reach the age of 34.
You cannot pay in further savings once you have started to use the savings in the BSU account or the contract has been breached.
New rules from 2021
From 2021, you cannot claim a deduction if you have full or part ownership of a primary or secondary dwelling as of 31 December in the income year. This applies to both direct and indirect ownership.
If your bank has reported the deduction to the Tax Administration, you will find it in your tax return. This assumes that you actually meet the terms of the BSU deduction.
If the deduction is not shown in your tax return and you have actually paid savings to a BSU account during the year, you must ask the bank to notify the Tax Administration of the amount.
- Purchase a new permanent home for your own use (e.g. to purchase a freehold property or cooperative or stock apartment). The savings do not have to be used to purchase a first home.
- Purchase sum for essential plots
- Payment of interest and instalments on loans for existing residential property, essential shares or stocks. The condition for this is that the property, etc. was purchased after the BSU contract was established.
- Purchase of garage
- Improvements to or maintenance of a residential property, even if it is new; these are not considered to be expenses relating to the purchase of a property.
- Purchasing or repaying debt on properties other than your own permanent home
- For example, savings in a BSU account cannot be used to purchase a holiday home without breaching the conditions for tax deductions.
In the event of a breach of the rules for BSU savings accounts, an addition will be made to the tax payable for the income year in which the rules are broken corresponding to the amount of tax for which a deduction was previously given. If a proportion of the savings is used in accordance with the applicable conditions, the addition will only be made to the tax that relates to the part of the savings which was not used to purchase a new permanent home. In the case of partial withdrawal for a residential property, the conditions for first-time withdrawals will be assessed.