Paying tax to several countries - Tax value of housing/holiday properties abroad
As long as you are resident in Norway for tax purposes, wealth in the form of property abroad will normally be liable for tax in Norway. The wealth may however also be liable for tax in the country in which the property is located.
Tax treaties with many countries
To avoid double taxation, Norway has entered into tax treaties with many other countries. Most countries, such as Sweden, Denmark and Italy, do not have a wealth tax.
Spain, France and Switzerland have a wealth tax, but they use different threshold amounts compared with Norway.
If you have paid wealth tax to another country in addition to Norway, you may be entitled to a deduction on your Norwegian wealth tax.
The method used to avoid double taxation will depend on where the property is situated and what rules apply for the tax treaty with the country concerned.
The usual method for avoiding double taxation is through what's known as the credit method. With this method, tax value that's paid abroad can be deducted from the Norwegian wealth tax. This applies for example when the property is situated in France, Spain or Switzerland. The same applies when no tax treaty has been established with the country concerned.
If you claim a deduction on Norwegian tax for tax that you've paid abroad, you must fill in the your tax return. You must also document the amount of wealth tax that you've paid abroad, if we ask for it.
You cannot claim a deduction on your Norwegian tax for foreign property tax.
Examples of foreign taxes that do not give entitlement to a credit deduction
- Kommunal fastighetsavgift (Sweden)
- Kiinteistövero (Finland)
- Ejendomsværdiskat (Denmark)
- Council Tax (United Kingdom)
- Taxe Foncière (France)
- Taxe d’habitation (France)
- Taxe Professionelle (France)
- Impuesto Bienes Inmuebles (IBI) (Spain)
- Renta de no Residentes (Spain)
- Internal tax paid to the EU according to the EU’s Protocol on the Privileges and Immunities of the European Communities, Article 12 (formerly Article 13) by an employee of the European Commission.
Some tax treaties apply what's known as the distribution method to avoid double taxation. This means that the property will not be subject to wealth tax in Norway.
As the wealth and any rental income or gain on sale is not taxed in Norway, you'll neither be entitled to the full deduction for any debt and interest on debt that you may have, regardless of whether or not the debt is linked to property abroad. Debt and interest on debt will be limited to the share that's proportionate to your wealth that's taxed in Norway.
Special rules apply if you own a house/apartment or holiday home in another EEA state, and income and gains are tax-free in Norway under The tax treaty with the country in which the housing or holiday home is situated. You'll then still be entitled to a full deduction for interest on debt. This applies if you have housing or a holiday home in Belgium (applies up to and including the income year 2018), Italy or Croatia.
Even if the property is not taxable in Norway, you, as a tax resident in Norway, still have an obligation to provide information about the value of the property (and any rental income and gain connected to the sale of the property) in your Norwegian tax return. The reason for this is that in these cases, you’re not entitled to full deductions for your debt and debt interest. Deductions for debt and interest on debt are limited to the proportionate part of your foreign wealth that is exempt from taxation in Norway. However, this does not apply if the property is located in Belgium (up to and including the 2018 income year), Italy and Croatia.
You do not need to send us any documentation concerning this, but you must be able to present it upon request.