Tax when you rent out houses and properties

Here we’ll let you know how to handle your taxes when you rent out a residential property, an apartment, holiday home or other forms of property in Norway or abroad.

The information is meant for tax residents in Norway and tax residents in other countries who own property in Norway that is rented out.

Find out what applies to you

You must answer 2 to 9 questions to enable us to provide you with the information relevant to you.

Expenses and deductions

Whether rental income is tax free or taxable depends on, among other things, what kind of property you rent out.

Usually, you pay 22 percent tax on your surplus.

The rental activity can be considered business activity

Find out whether the rental acitvity should be considered business activity. Any surplus will be taxed at a rate of up to 50.6 percent.

When the rental income is taxable, you can claim a deduction for deficits if your expenses exceed the income.

You cannot claim a deduction for expenses related to short-term rentals of your own home or holiday home that you use yourself.

You may only claim a deduction for expenses related to maintenance.

That is, expenses related to work performed to restore the property to its former condition.

Expenses related to work that improves the property or alters the house are considered upgrades.

You cannot claim deductions from the rental income for expenses related to upgrades.
Upgrades can be added to the input value of the property.

If the property 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.

Performing repairs to the same standard as before.
Painting the house/rooms if they were previously painted.
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 an equivalent size.
Replacing a bathtub, mixer taps and ordinary taps to maintain 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 a previously tarmacked road/courtyard.

Painting the property 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’s considered an upgrade. The replacement of an old bathroom with one of the same standard as before will be considered maintenance.
Putting down tarmac for the first time.
Prepare a plot of land for building (water, water supply, road and electricity).

The limitations below do not apply if you buy a residential property/holiday home that’s only used for renting out and not by yourself.

The two limitation rules below will apply if you now have rental income that’s taxable in its entirety, but you have done the following in the five previous years:

you’ve lived in the residential property and did not rent out any part of it
you’ve rented out the residential property, but none of the rental income was taxable
you’ve been taxed for renting out your own home as a short-term rental (standard)
you’ve used it as your own holiday home and did not rent out any part of it
you’ve rented out your own holiday home, but the rental income has been taxed according to the standard method

If could also be necessary to limit your right to deductions for maintenance expenses in cases where there’s a transition from your own use of the residential property to a situation where the property is vacant while awaiting taxable income (accounts based assessment).

1. Limitation when renting out your property under 6 months in the first year

If you rent out the property for less than 6 months the first year, you cannot deduct any maintenance costs at all for the first rental year.

2. Limitation of the deduction in the first five years

If you rent out for more than 6 months the first year, you can claim a deduction for maintenance expenses for the first NOK 10,000. For expenses over NOK 10,000, the deduction is limited according to the following rates:

Deduction for maintenance expenses:

Number of years of tax-exempt assessment during the last five years:	The deduction for maintenance expenses:
5 years	NOK 10,000 + 50% of the amount exceeding NOK 10,000
4 years	NOK 10,000 + 60% of the amount exceeding NOK 10,000
3 years	NOK 10,000 + 70% of the amount exceeding NOK 10,000
2 years	NOK 10,000 + 80% of the amount exceeding NOK 10,000
1 year	NOK 10,000 + 90% of the amount exceeding NOK 10,000
0 years	Full deduction

Example

You own a residential property that you have lived in yourself for more than 5 years and from which you have not previously had taxable rental income. The property is now to be used as a rental property.

In year 1 you rent out more than half the residential property for 8 months, and the rental income is more than NOK 20,000 in the calendar year. The rental income is therefore taxable.

You also rent out the entire residential property in year 2.

The maintenance expenses in year 1 amount to NOK 100,000.

The deduction in year 1 will then be NOK 10,000 + (50 percent x 90,000), amounting to (10,000 + 45,000) NOK 55,000.

If the maintenance expenses are the same in year 2, the deduction will be NOK 10,000 + (60 percent x 90,000), amounting to (10,000 + 54,000) NOK 64,000.

Please contact us if you want to know more about limitations to the entitlement for deducting maintenance expenses.

You may claim a deduction for the municipal taxes that you pay for the property you rent out.

You may claim a deduction for property insurance and home contents insurance relating to the rental property.

If you pay property tax for the rental property, this amount is deductible.

Wealth tax on the residential property you rent out is not deductible.

You may claim a deduction for expenses relating to advertising the rental property. The same applies if you pay for intermediation and showings in order to find a tenant.

If you pay ground rent for the plot of land in connection with the rental property, this amount is deductible. Ground rent (lease of plot of land) payments must be made to the landowner if you do not own the plot of land yourself.

You may claim a deduction for expenses relating to electricity, heating and cleaning for the rental property if you pay for this yourself. If these expenses are included in the rent, you’re considered to pay these yourself.

You may also claim a deduction for cleaning products you paid for.

The wear and tear of furniture and home contents is deductible.

Some investments may be claimed as deductions right away. Others must be depreciated, which means the expense is deducted over several years. When you depreciate an asset, it means you’re claiming a deduction for the asset’s reduction in value as the result of wear and tear.

Recognising deductions in the purchase year

If you rent out the residential property with furniture and home contents included, you may claim a deduction for all your expenses in the year of purchase if:

they’re mainly purchased for use in the rental property, and
their value is reduced as a result of wear and tear and/or ageing, and
they have an input value of less than NOK 15,000 (NOK 30,000 in 2024) or a useful life of less than three years

Example of recognised deductions in the purchase year:

If you buy a bed for NOK 13,000, you may claim a deduction for the entire amount in the year of purchase. The same applies if you buy a snow shovel that costs NOK 700.

Depreciations

If the purchase price of furniture and fixtures is NOK 15,000 (NOK 30,000 in 2024) or more, you can depreciate the cost (balance group d, depreciation rate 20 percent). In practice, it will never reach zero, but when the amount is less than NOK 15,000 (NOK 30,000 in 2024) (before this year’s depreciation), the entire residual value (balance) is deductible.

Depreciation example:

If you buy a couch that costs NOK 50,000 in year 1, you can claim a deduction for depreciations amounting to (50,000 x 000 x 20 percent) NOK 10,000 in the first year.

In year 2, the residual value is (50,000 – 10,000) NOK 40,000, and you can claim a deduction for depreciations amounting to (40,000 x 20 percent) NOK 8,000 for the second year.

Exemptions from depreciation

If you rent out a furnished property for less than three years, and you as the owner use the furniture yourself before and after the rental period, you can claim a deduction for 15 percent of the gross rental income instead of deducting declining-balance depreciations.

Example of how deductions are calculated:

You’ll be renting out your furnished residential property for two years.
The agreed annual rent is NOK 200,000.
Instead of declining-balance depreciations, you can claim a deduction for depreciations amounting to (200,000 x 15 percent) NOK 30,000 in both year 1 and year 2 (in total, NOK 60,000).

You may claim a deduction for common expenses that you pay to the housing association or the jointly owned housing company where your rental property is located.
You cannot claim deductions for payments of common debt. If these payments are included in the common expenses, you must deduct them from the common expenses before you claim the deduction in your tax return.
Interest on common debt is not deductible when calculating the taxable rental income.

You can claim a deduction for travel expenses connected to the rental. For example, showings, maintenance and supervision. Presuming the rental activity is not considered business activity, you can claim a deduction for your actual expenses. If you use your own car, you can claim a deduction according to the rate for business travel.

If you run the rental activity as a business, you can claim a deduction according to the general rules for travel to/from work and business travels. In the case of up to 10 trips per year to a rental property or if you’re required to spend the night away from home, the trips are considered business travel. If the travelling involves more than 10 days a year and you do not stay overnight on the trip(s), this will be considered work-related travel.

If you’ve opened a security deposit account in your bank in connection with the rental, you can claim a deduction for the fee.

You may claim a deduction for expenses related to surveys of the rented-out residential property when reporting information about the area in order to assess the taxable value of your property.

You can claim a deduction for the value of your own work effort if you carry out maintenance work on your rental property. However, this presumes that the same amount has been entered as income in your tax return in the same year that you carried out the work. This is because the value of the work you carry out is taxable. You can only claim a deduction for this in the same year that you carried out the work.

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 what a tradesman would have charged, 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 related to upgrades cannot be deducted, but the value of such work can be added to the input value if you later sell the property. The value of the maintenance work you carry out cannot be added to the input value if you later sell the property.

Tax when you rent out commercial property

By commercial properties, we include property that’s used in its owner’s or tenant’s business activity.

Examples: shops, offices, warehouses, premise for industrial activity, parking garages, etc. Renting out residential properties and holiday homes can also be included in the owner's business activity.

Renting out business properties

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.

Taxable rental activity must be included in the tax return.

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).