When the taxable value of your residential property has increased due to a change in municipal structure

The municipal structure was changed from 1 January 2020. As a result of this, the calculated market value (property value) of residential properties in some municipalities increased. This leads to a potential increase of the property's taxable value, whereas the real value of the residential property has not actually increased.

A transitional rule was adopted from and including the 2020 income year to protect those whose residential properties may have increased in calculated taxable value due to a change in municipal structure.

In the tax return for the 2020 income year, those who are covered by the transitional rule can opt to use the calculated market value for 2019, calculated according to the property value, adjusted for a price increase after 2019, as the basis for the taxable value for the 2020 income year.

This is what you have to do in the tax return for the 2020 income year

If the transitional rule applies to you, you should have received a letter from the Tax Administration where the price-adjusted value is confirmed. 

Log in to view your tax return and follow the guide that’s described in the letter you’ve received.

The best solution for most people

For most, the price-adjusted 2019 value (the transitional rule) will be the most favourable option to use for the 2020 income year. In some cases, it may be more favourable to keep the value that’s pre-filled in the tax return. You can read more about this below. 

In cases where the price-adjusted 2019 value is higher than the calculated market value (property value) for 2020, the most favourable option will be to use the pre-filled value as the basis for the taxable value.

If this is the case for you, you should have received a letter from us about this.

If you’ve reduced the taxable value on your residential property for a previous year based on a documented market value, you’re entitled to a proportional reduction of the calculated market value (property value) and taxable value for the following five years. The calculated market value in your tax return for 2020 will then be lower than the calculated market value (property value) that’s confirmed in the letter from us.

It will not always be favourable to choose the lowest calculated market value. This is because the percentage rate when calculating market value is higher when the calculated market value is adjusted downward based on the documented market value for previous years. You should therefore check whether it’s more favourable for you to keep the downward adjusted calculated market value in the tax return, or if you should use the price-adjusted 2019 value.

Example

The example below sets forth that your residential property is a primary dwelling, that you own 100 percent of the property and that the valuation applies for the 2020 income year.

Calculated market value (property value)

 

Calculated market value (property value) for the 2020 income year (housing calculator 2020)

NOK 5,200,000

Calculated market value on the basis of price-adjusted 2019 value (Housing calculator 2019 + price increase):

NOK 4,944,000

Calculated market value reduced based on the documented market value for previous years:

NOK 4,264,000
When the taxable value is calculated on the basis of the calculated market value (property value), the taxable value is set to 25 percent of the calculated market value for primary dwellings, and 90 percent for secondary dwellings.
The same percentage rates apply when you use the price-adjusted 2019 value (transitional rule).
If you’ve reduced the taxable value based on a documented market value, the taxable value is set to 30 percent of the calculated market value for primary dwellings, and 100 percent for secondary dwellings.

Calculated taxable value

 

Taxable value calculated on the basis of calculated market value (25 percent of property value) for the 2020 income year:

NOK 1,300,000

Taxable value calculated on the basis of price-adjusted 2019 value (25 percent of property value):

NOK 1,236,000

Taxable value calculated on the basis of downward adjusted calculated market value (30 percent of property value), based on the documented market value for previous years:

NOK 1,279,200
Here you should choose the value that gives you the lowest taxable value. In the example, we see that the price-adjusted 2019 value (transitional rule) provides the lowest taxable value.

This only applies to you who:

  • have reduced the taxable value of our residential property for a previous year,
  • live in a municipality charging property tax on residential property, and
  • the municipality uses our bases for the taxable value when calculating the property tax rates.

When you’re not liable to pay wealth tax, but the basis for the taxable value is used when calculating property tax:

If your residential property is in a municipality that uses the Tax Administration’s basis for the taxable value when issuing property tax, and you’re not liable to pay wealth tax, you should choose the value that provides the lowest calculated market value. In the example, we see that it’s the downward adjusted calculated market value based on documented market value from a previous year that provides the lowest calculated market value on the residential property.

When you’re liable to pay wealth tax, and the basis for the taxable value is used when calculating property tax:

If you’re liable to pay wealth tax, and your municipality uses the Tax Administration’s basis for the taxable value when issuing property tax, you should make a specific assessment of what will be most favourable for you.

You can read more about tax rates and thresholds for wealth tax.

You’ll find information about how your municipality calculates property tax on your residential property by visiting your municipality’s web page.