Tax when you sell a residential property or other property

You'll learn what to do with your tax when you own and are going to sell or otherwise divest a residential property, apartment, holiday home, or other property in Norway or abroad. 

This applies to you if you're tax resident in Norway.

Find out what applies to you

You have to answer some questions, then we can help you. 

The main rule 

It is not taxable to inherit or receive a property as a gift, but if you sell the property, any profit is generally taxable. A loss would then be deductible. 

The date of death or the date the gift was received determines what applies to you. When we write "inheritance/gift received in 2014 or later," it means the person you inherited from died in 2014 or later, or you received the gift in 2014 or later. 

Exceptions to the main rule 

If you have used the property yourself as a residential property, holiday home, or commuter accommodation, the profit may be tax-free for you in some cases. If you sell at a loss, the loss is not deductible if the profit would have been tax-free. See the guidance below and answer the questions to find out what applies to you. 

 

There are different rules depending on whether the deceased person or the donor could have sold the property tax-free at the time of death or gifting. This can affect whether a profit is taxable or a loss is deductible when the heir or recipient sells, and how the gain or loss is calculated.

A hypothetical sale for the deceased person/donor would generally only be tax-free for: 

  • Residential property/commuter accommodation – if the deceased person or donor has owned the residence for over a year and used it as their own residence for at least one of the last two years at the time of death/gifting. 
  • Holiday home – if the deceased person or donor has owned the holiday property for over five years and used it as their own holiday property for at least five of the last eight years at the time of death/gifting. 

To find out if a gain is taxable or a loss is deductible, you need to answer the questions.   

It's important to read the help texts when you're asked about how long you've owned and lived in or used the property.  

If a gain becomes taxable, you'll get help calculating the profit or loss after answering all the questions. 

If you've received an inheritance or gift in 2014 or later and the deceased person/donor was not tax resident in Norway at the time of death/gifting, you should answer the questions as if the deceased person or donor could have sold tax-free at the time of death/gifting. 

To find out if a gain is taxable or a loss is deductible, you need to answer the questions.  

If a gain becomes taxable, you'll get help calculating the profit or loss after answering all the questions. 

If an estate sells a property, any gain is always taxable and any loss always deductible. Read more about selling and transferring assets from the deceased.

The gain or loss must be entered in the tax return of the deceased or the decedent’s estate. 

When the estate sells, you as the heir should not report the gain or loss in your tax return. 

You can get help to calculate gain or loss for the estate by answering "No" if you're asked about: 

  • whether you've lived in or used the residential property/holiday home/commuter accommodation 
  • whether you've been prevented from using the residential property/commuter accommodation 

What do the terms mean?

Sale price minus selling costs.
Sale price (proceeds from sale)

The sale price is everything you receive as payment when selling the property. This usually consists of an amount that is paid and/or debt transferred as part of the sale.

Selling costs

The starting value is reduced by costs you've had in connection with the sale. This may include estate agent commission, advertising costs, styling, and legal costs related to disputes about the sale. You cannot deduct moving costs or costs for clearing out a decedent's estate.

Purchase price/acquisition value plus other costs (stamp duty, registration fee), plus any upgrades made during your period of ownership.

Explanation of the terms:

Inherited or received the property as a gift?

Then it’s especially important to determine how to calculate your acquisition value.

Upwards adjustment of purchase price or acquisition value, upgrades and other acquisition costs

If you’re selling a property that’s been owned since 1990 or earlier, you may adjust the purchase and acquisition value, upgrades and other acquisition costs upwards. This can result in lower taxes.

Work that improves or alters the property.

Example:
If the building was previously of a normal standard and is upgraded to a high standard, the expenses related to the difference between normal and high standard will be considered an upgrade.

  • Upgrades made during the period of ownership can be deducted from a taxable gain, or increase a loss for which you're entitled to a deduction.
  • Maintenance expenses cannot be deducted from a tax gain, or increase a loss for which you're entitled to a deduction.

The form for specification of maintenance and upgrades (in Norwegian only) may be helpful in order to decide which expenses are related to maintenance and which are related to upgrades.

What is an upgrade and what is maintenance

Upgrades: 

  • Painting the building for the first time.
  • Demolishing and moving a wall to make a larger room.
  • Extending the electrical installations/pipework.
  • Installing a fireplace.
  • When replacing a wood-burning stove with a pellet-fired stove, the added cost associated with the purchase and installation of the pellet-fired stove will be considered an upgrade.
  • If a bathroom is moved to a different room in the house, it is considered an upgrade. Necessary maintenance of old bathroom to keep it to the same standard as before will be considered maintenance. The upgrade that can be added to the acquisition value/purchase price is the difference between the total upgrade and the assumed necessary maintenance of the old bathroom.
  • Putting down tarmac for the first time.
  • Prepare a plot of land for building (water supply, sewage, road, and electricity).

Maintenance: 

  • Performing repairs to the same standard as before.
  • Repainting the building.
  • Replacing floors/wall panels, windows, etc. to maintain the same standard as before.
  • Sanding parquet flooring.
  • Replacing pipework.
  • Replacing the water heater with one of equivalent size.
  • Replacing a bathtub, mixer taps, and ordinary taps to achieve the same standard as before.
  • Replacing kitchen fittings with new ones that are, by today’s standards, considered to achieve the same standard as before.
  • Maintenance of previously laid tarmac.

The value of work you carry out yourself on new buildings or upgrades can be deducted from a taxable gain or increase a loss for which you're entitled to a deduction. The value of the work you carry out must be set to what it would have cost to have work of the same quality performed by others.

The hourly rate for non-tradesmen must generally be set lower than that of a tradesman, for example, to the hourly rate for unskilled labour. You can find the rates on the Norwegian Labour Inspection Authority’s website.

The value of the work you carry out is taxable, and it must be recognised as income in the year the work is carried out. This does not apply to work in your spare time on your own home or holiday home that you use yourself.

The tax rules that apply to the sale of property are the same as those that apply to other situations where the ownership of a property ceases. A common name for all situations, including sales, is realisation.

A property is considered to be realised when the right of ownership ceases or is transferred to another by, for example:

  • voluntary sale and discounted sale
  • forced sale, such as expropriation, allodial transfer, and forced sale
  • exchange and swap of real estate
  • loss or complete destruction, for example, in the case of a fire, flood, landslide, or demolition

In other words, the same rules apply to the sale of property and other realisations of property as apply to tax liability/tax exemption for gains and the entitlement to a deduction for a loss or the lack thereof. You can therefore find out whether or not there is a tax liability/deduction entitlement for gains or losses on a property that, for example, has burned to the ground.

The following are not considered sales/realisations:
  • when you give a property away without payment
  • transferrals between spouses
  • division of community property between spouses
  • inheritance
  • division of a deceased person’s estate
  • land consolidation

Indicative answer

Since we have not considered all the circumstances affecting your taxes, this response is only an indicative answer. It’s not a binding answer from us.

You must declare the taxable gain or deductible loss on sales in the tax return.

Sale of agricultural and forestry properties

If you're selling a farmhouse on a farm, you'll find out whether the sale of the farmhouse is tax-free or taxable in the guide to selling farms. The guide also explains how to calculate taxable gains or deductible losses.

A farmhouse may be sold as, for example, a separate residential property or a holiday home.

Important information

This guide does not necessarily cover all types of circumstances. You can find more detailed information about the applicable rules in the guide Skatte ABC (in Norwegian only).

If you sell a home under construction, so-called sale of contract positions, then in practice it's the rights and obligations according to the agreement with the developer that are sold. 

Selling a contract position

Read more about income and wealth in the Nordics (Nordic eTax)