Taxable value of commercial properties
By commercial property, we mean any property that is used for or suited for commercial activity. This could, for example, be offices, shops, storage facilities, and factories.
You can own a commercial property without carrying out commercial activity, as it is the features of the premises will be the deciding factor. Undeveloped land used for commercial activities can also be a commercial property.
Residential properties, agricultural properties, forests, and power generation facilities are not considered commercial properties. This applies even if the rental activity is so extensive that it’s considered commercial activity or part of commercial activity for you as the owner of the property.
The main rule is that holiday homes are not commercial properties. If the rental activity is extensive or is part of another activity, the holiday home must still be considered a commercial property.
If the area used for housing is more than half of the property’s area, then the whole property must be valued using the rules for residential properties. Any primary area in the commercial part must be included in the primary area for the residential property.
Shops, hair salons, home offices and other office areas are examples of rooms typically suitable for permanent residence and will therefore be defined as primary area. However, areas that are solely used for storage purposes or similar are generally considered secondary areas and should not be included in the basis for calculating your wealth.
When the property is rented out for only part of the year
The wealth must be calculated based solely on rental income. To do this, divide the total rental income by the number of months the plot of land has been rented out, then multiply by 12 months. Any partial month is considered a full month.
Example:
The plot of land is rented out from 15 January to 3 July.
The rental income is NOK 50,000.
NOK 50,000 / 7 months x 12 months = NOK 85,714 in annual rental income
Rental value forms the basis for calculating the taxable value
When calculating the rental value, you’ll receive a standard deduction for ownership costs. The standard deduction is set at 10 percent of the gross rental income. The rental income is therefore multiplied by 0.9. The rental income is then divided by a calculation factor, which is determined each year.
For the 2024 income year, the calculation factor is 0.086.
Exception: For commercial properties owned by unlisted companies that are located in municipalities other than Oslo, Bergen, Trondheim and Stavanger, the calculation factor is 0.096.
The calculated rental value is:
NOK 85,714 in rental income x 0.9 / 0.086 calculation factor = NOK 897,007 in rental value.
The taxable value is determined based on the rules for commercial properties that have not been rented out.
For commercial properties under construction, the valuation is based on the calculated area of the completed part of the property. The valuation must be based on an overall assessment, taking into account the planned size and investment profile. The amount of work remaining on the building, relative to the total work required, will be an important indicator of the valuation.
How the taxable value is set:
Completed area in square metres x calculated square metre rent x 0.9 / calculation factor = calculated value
Example: A warehouse in Oslo
500 square metres x NOK 945 (rent per square metre) x 0.9 / 0.0.86 (calculation factor) = NOK 4,944,767 in calculated value
How the taxable value is calculated
As a general rule, for the 2024 income year, the taxable value of commercial properties is set to 80 percent of the calculated rental value, regardless of whether the property is rented out.
- If the property is rented out, the taxable value is based on actual rental income.
- If the property is not rented out, the rental value is determined using a standard method. The property is then valued based on calculations from Statistics Norway, which take into account its location, what the property is used for, and the area of the property. You must provide this information in your tax return to calculate the taxable value.
- half or more of the property was rented out as at 31 December of the income year,
- or half or more of the property was rented out earlier in the income year, and you did not use it yourself before 31 December,'
- or half or more of the property was rented out in previous years, but not in the income year, and you did not use it yourself in the income year (the property was not in use).
- you rented out less than half of the property
- or you rented out the property earlier in the income year but started using it yourself by the end of the year,
- or when the property was not rented out as at 31 December in the income year.
How to enter this in your tax return
When you’re logged in to your tax return, you must check if the information is correct. If the taxable value is not shown in the tax return or if the information about the commercial property is incorrect, you must enter the correct details. You’ll receive guidance once you’re logged in to your tax return.
Changing the taxable value
(Applies to commercial property that has been rented out, as well as commercial property that has not been rented out)
If the calculated rental value of the commercial property exceeds its documented market value, you can request that the taxable value be reduced to 80 percent of the documented market value.
You’re entitled to a reduced taxable value in the income year, as well as a proportionate deduction in the tax value for the five subsequent income years. You must claim this reduction yourself in the tax return.
When valuing commercial properties based on the property’s documented market value, the supporting documents must:
- be from the first income year for which it is to apply, at the earliest,
- be completed no later than when the reduction is requested, and must be available upon request,
- be prepared by an independent party,
- be prepared by someone with relevant professional expertise to carry out valuations of commercial properties, such as a valuer or commercial real estate agent, and
- include an account of the assessment of the property’s market value and the conditions on which it is based
The property’s sales price in the income year the reduction is claimed will also be considered the documented market value, provided that the sale is a free sale between independent parties.
Changing the taxable value for the 2023 and 2024 income years
A commercial property has a calculated rental value of NOK 16,000,000 in 2023. According to the main rule, the taxable value is set at 80 percent of the calculated rental value, which amounts to NOK 12,800,000.
You have proof that the property’s market value is NOK 14,000,000, so the taxable value for 2023 will be reduced to NOK 11,520,000 (NOK 14,400,000 x 80 percent).
The difference between the calculated rental value and the documented market value is NOK 1,600,000. The percentage difference is 10 percent (100 x 1,600,000)/16,000,000).
You can use this percentage difference for the five subsequent income years.
For 2024, the calculated market value is NOK 17,000,000. This value will be reduced by 10 percent, which amounts to NOK 1,700,000. The new calculated rental value to be used as a basis for the 2024 assessment will be NOK 15,300,000 (17,000,000 – 1,700,000).
The taxable value for 2024 will be set at 80 percent of the calculated rental value of NOK 15,300,000, which equals NOK 12,800,000.