Tax rules for short-term letting of homes and holiday homes in 2017 and earlier

For 2017, there are no special tax rules for so-called short-term letting of homes/holiday homes. 

This means that short-term letting, for example, via Airbnb, is subject to the same tax rules as more traditional long-term letting of property.

A more detailed description of how to enter rental income in the tax return and entitlement to deductions for costs etc. is available under different housing types

Read more  below about income from short-term letting and the threshold for business activity for the different housing types.

If you let out your entire home and the rental income is NOK 20,000 or less per year, the income is tax-free.

If the rental income exceeds NOK 20,000, the entire rental income is tax liable from the first krone.

As a general rule, any profit will be taxed as capital income at the rate of 24 percent in 2017. Correspondingly, you may deduct any losses. (See rates for general income for earlier years)
However, rental income shouldn't always be taxed as capital income. In some cases, rental income can be taxed as business income, at a tax rate of up to 49.92 percent in 2017. Whether the letting is considered a business activity or not depends on an overall assessment that is 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 to let your entire home through short-term and frequent lettings.

The "Am I self-employed?" wizard is available here.

Contact us if you're unsure how your income should be taxed.

If you let more than half of your home (calculated according to rental value) and the income is more than NOK 20,000 per year, the rental income is tax liable in its entirety. If the annual rental income amounts to NOK 20,000 or less, it's tax-free.

"More than half" is determined on the basis of the house's rental value on the open market for the purpose which the areas are to be used for. Concerning the part you live in, the rental value will be calculated against a supposed long-term rental income.

For the let area, the rental value will depend on the tenant's use of the area, for example, for housing on a long-term or a short-term and frequent basis.

If you let part of your home for short-term accommodation, the rental income may well be higher than for a long-term let, and the value of the let area may be higher than that of the part you live in. This in turn may mean that you're deemed to be letting "more than half" of your home. In this case, you'll be tax liable from the first krone if the rental income exceeds NOK 20,000. Even if you let "more than half" of your home, annual total rental income of NOK 20,000 or less will always be tax-free.

Your own use of the let area between letting periods will also affect how the rental value of the area is assessed.(Note. The NorwegianTax Administration has changed practice in this area with effect from the income year 2018).  In a statement of principles, the Tax Administration has declared that the determinative factor in assessing rental value is whether the lessor uses the let area himself when it isn't let out. For example, if you let a bedsit that you use when it isn't let out, the value of the let part will be the letting amount per night multiplied by the number of actual days let per month.

However, if you don't use the let part between letting periods, and this part is purely a let area, the rental value of the let part will be the rental sum per day multiplied by the number of days per month (30 on average). Hence, in a situation where you don't use the let part when it isn't let, the value of the let area may well be higher than the rest of the property.

As a general rule, any tax liable profit will be taxed as capital income at the rate of 24 percent in 2017. Correspondingly, any deficit will be deductible.
If you let more than half of your home (calculated according to rental value), and have annual rental income of more NOK 20,000, in certain cases this may be considered letting as a business activity, at a tax rate of up to 49.92 percent in 2017. Whether the letting is considered a business activity depends on a specific overall assessment that, among other things, is based on the scope, frequency and duration of the activity.

Usually, for the letting to be assessed as a business activity, you have to let a high proportion of your home through short-term and frequent lettings.

Contact us if you're unsure how your income should be taxed.

If you let less than half of your home, the rental income is tax-free. In that case, you're not entitled to a deduction for costs related to the letting.

"Less than half" is determined on the basis of the house's rental value on the open market for the purpose that the areas are to be used for. Concerning the part you live in, the rental value will be calculated against a supposed long-term rental income. For the let area, the rental value will depend on the tenant's use of the area, for example, for housing on a long-term or a short-term and frequent basis.

If you let part of your home for short-term accommodation, the rental income may well be higher than for a long-term let, and the value of the let area may be higher than that of the part you live in. This in turn may mean that you're deemed to be letting "more than half" of your home. In this case, you'll be tax liable from the first krone if the rental income exceeds NOK 20,000. Even if you let "more than half", annual total rental income of NOK 20,000 or less will always be tax-free.

Your own use of the let area between letting periods will also affect how the rental value of the area is assessed. (Note.The NorwegianTax Administration has changed practice in this area with effect from the income year 2018).

In a statement of principles, the Tax Administration has declared that the determinative factor in assessing rental value is whether the lessor uses the let area himself when it isn't let out. For example, if you let a bedsit that you use when it's not let, the rental value of the let part will be the letting amount per night multiplied by the number of actual days let per month.

However, if you don't use the let part between letting periods, and   this part is purely a let area, the rental value of the let part will be the rental sum per day multiplied by the number of days per month (30 on average). Hence, in a situation where you don't use the let part when it isn't let, the value of the let area may well be higher than the rest of the property.

If you let "less than half" of your home (calculated according to rental value), and the conditions for tax-free letting are met, the letting will never be considered a business activity.

Contact us if you're unsure how your income should be taxed.

In the case of a holiday home that you also use for leisure purposes to a reasonable extent, rental income up to NOK 10,000 per year will be tax-free – even if the income derives from short-term letting. Of the excess amount, 85 percent 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 homes that you don't live in or use yourself will generally be tax liable from the first krone.

Any profit will be taxed as capital income at the rate of 24 percent in 2017. Correspondingly, any deficit will be deductible.

However, it's not 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 49.92 percent in 2017.

Whether the letting is considered a business activity or not, depends on an overall assessment that is 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 to have several rental properties and/or frequent lets.

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 be taking place even if only one housing unit is being let.

Contact us if you're unsure how your income should be taxed.