Valuation discount in connection with assessment of wealth
You’ll be granted a reduction of the taxable value of some assets, a so-called valuation discount. For some assets, you’ll also be granted a reduction in the deduction for debt, a so-called debt reduction.
What is a validation discount?
A valuation discount is a discount granted for the value of certain assets, such as residential and commercial property, shares, etc. and fixed assets. The valuation discount reduces the basis for net wealth tax and may result in lower net wealth tax if you have net wealth that exceeds the minimum amounts, see the rates concerning net wealth tax.
If you have debt, the deduction for debt will be reduced proportionately between the value of some assets with a valuation discount and the value of your total wealth. If you have a spouse, registered partner or a spouse-equivalent cohabitant, the debt deduction will be reduced taking into account the total assets and debt of both of you.
Peder Ås has NOK 1,800,000 in debt as at 1 January 2023. His wealth before the valuation discount is NOK 6,000,000.
He owns the following assets:
- Primary dwelling with 75 percent valuation discount
- Units of equity funds with 20 percent valuation discount as at 1 January 2023.
- Bank deposits (other wealth) that do not give you the right to a valuation discount.
In this case, the debt for which he receives a deduction is reduced by NOK 30,000. The amount has been calculated by distributing the debt of NOK 1,800,000 between the assets. The equity fund units’ portion of the debt amounts to NOK 300,000. This portion is reduced by 25 percent due to the valuation discount.
|
|
Primary dwelling valued at 25 % |
Units in equity fund valued at |
Other wealth valued at full value |
Total |
|
Value before valuation discount |
4,800,000 |
1,000,000 |
200,000 |
6,000,000 |
|
Share of sum wealth |
80 % |
16.67 % |
3.33 % |
100 % |
|
Taxable value |
1,200,000 (25 %) |
800,000 (80 %) |
200,000 (100%) |
1,950,000 |
|
Share of debt before adjustment for valuation discount |
1,440,000 (1,800,000 x 80 %) |
300,000 (1,800,000 x 16.67 %) |
60,000 (1,800,000 x 3.33 %) |
1,800,000 |
|
Deductible debt |
1,440,000 (no reduction) |
240,000 (300,000 x 55 %) |
60,000 |
1,665,000 |
|
Taxable net wealth |
- 240,000 |
560,000 |
140,000 |
285,000 |
Completing the tax return
Normally you’ll receive a pre-filled tax return. Taxable wealth of real property will be entered after deduction of valuation discount.
Wealth from shares, equity certificates, share components of share savings accounts and share component of units in securities funds will be pre-filled before valuation discount. You must not adjust these amounts downwards, because the valuation discount will be deducted on your tax assessment notice.
You must not reduce the pre-filled debt in the tax return. The reduction is registered automatically in your tax assessment notice. If you have debt that is not pre-filled in the tax return, you must enter the total amount.
In the table below, you can see the type of assets and the size of the valuation discount.
Note! The valuation discount provided in the table does not take into consideration whether the taxable value is reduced because you have documented a lower market value.
|
Assets |
Explanation |
Valuation discount in 2021 |
Valuation discount in 2022 |
Valuation discount in 2023 |
|
Primary dwelling on the Norway mainland |
Primary dwelling is the residential property where the owner has his or her registered address at the end of the year. |
75 percent |
75 percent, but limited to 50 percent for the part of the calculated or documented sales value that exceeds NOK 10,000,000 |
75 percent, but limited to 30 percent for the part of the calculated or documented sales value that exceeds NOK 10,000,000 |
|
Secondary dwelling on the Norway mainland |
This is other property or housing unit that cannot be characterised as a primary dwelling or holiday home. Generally, the land register (the state's official register of real property) will show if the property is considered a residential property or a holiday home. Wealth in the form of residential property on Svalbard or abroad is assessed based on the rules concerning holiday homes in Norway. A multi-unit building is generally to be considered a secondary dwelling, but if you live in one of the housing units at the end of the year, you may have the right to a valuation discount as a primary dwelling for the unit where you live. |
10 percent |
5 percent |
0 percent |
|
Commercial property on the Norway mainland and rented-out commercial property on Svalbard or abroad |
Commercial property is considered to be
However, in this context, residential properties, power generation facilities, agricultural properties and forestry properties are not considered commercial properties. |
45 percent |
25 percent |
20 percent |
|
Not rented out commercial property on Svalbard or abroad * |
|
45 percent |
25 percent |
20 percent |
|
Agricultural and forestry property |
|
45 percent |
25 percent |
30 percent |
|
Other real property in income-generating activity |
This applies to accounts-based assessment of
The property is subject to accounts-based assessment if you assess your income based on actual taxable income with deductions for actual deductible costs for the property. |
45 percent |
25 percent |
30 percent |
|
Unit in a business assessed as a partnership |
This is positive net wealth from a business assessed as a partnership or a Norwegian-controlled foreign company (NOKUS) that you must register as wealth because you’re a partner in the company or married to a partner in the company. |
45 percent |
25 percent |
20 percent |
|
Shares etc. |
This includes:
However, you’re not entitled to a valuation discount for a convertible bond or the subscription rights to shares. |
45 percent |
25 percent |
20 percent |
|
Share component of units in securities funds |
If you own units in hybrid funds, you get a valuation discount for the proportionate portion of the funds’ assets invested in shares. |
45 percent |
25 percent |
20 percent |
|
Other fixed assets in income-generating activity |
The valuation discount is deducted from the value that you enter for the following assets in the tax return:
However, you’re not entitled to a valuation discount for inventory or receivables. |
45 percent
|
25 percent |
30 percent |
* The valuation discount applies to the first-time valuation. The taxable value is either the cost price of the property including the plot of land minus the valuation discount or the market value minus the valuation discount. The value is carried forward to later income years unless something else has been agreed.
The summary below applies if you submit your tax return in the new version.
|
Topic |
Card |
Header 2023 |
Remarks |
|
Bank, loans and insurance |
Investment funds account |
Wealth, share component |
Value before valuation discount |
|
Housing and property |
Housing and property |
Taxable value of primary dwelling |
Value after valuation discount |
|
Taxable value of secondary dwelling |
Value after valuation discount |
||
|
Taxable value of multi-unit building |
Value after valuation discount |
||
|
Taxable value of other real property related to income-generating activity |
Value after valuation discount |
||
|
Taxable value of property subject to accounts-based assessment |
Value after valuation discount |
||
|
Taxable value of holiday property subject to accounts-based assessment |
Value after valuation discount |
||
|
Taxable value of farms |
Value after valuation discount |
||
|
Taxable value of commercial property |
Value after valuation discount |
||
|
Taxable value of forest property abroad |
Value after valuation discount |
||
|
Leasehold plots for residential and holiday property |
Value before valuation discount on capitalised ground rent |
Value before valuation discount |
|
|
Used hunting rights and the renting out of rights linked to forestry |
Rights linked to forestry |
Value before valuation discount |
|
|
Forest property |
Forest property |
Value after valuation discount |
|
|
Finance |
Shares |
Wealth |
Value before valuation discount |
|
Share savings account |
Wealth, share component |
Value before valuation discount |
|
|
Securities fund |
Wealth, share component |
Value before valuation discount |
|
|
Wealth and income in a business assessed as a partnership |
Wealth and income in a business assessed as a partnership |
Net wealth |
Value before valuation discount
|
|
Business activity |
Total debt and wealth from business activity |
Fixed assets from business activity |
Value before valuation discount |
|
Ships, fishing and whaling/sealing vessels |
Ships and vessels |
Value before valuation discount | |
|
Other circumstances |
Other wealth related to income-generating activity |
Amount |
Value before valuation discount |