Valuation discount in connection with assessment of wealth

You'll be granted a reduction in the tax value of certain assets (valuation discount). On certain assets your debt will also be reduced.

What is a validation discount?

A valuation discount is a discount which is granted for the value of certain assets such as housing and commercial property, shares, etc. and fixed assets. The valuation discount reduces the basis for wealth tax and results in lower wealth tax if you have net wealth which exceeds the minimum amounts; see the rates for wealth tax.

If you have any debts, the deduction for debt will be reduced proportionately between the value of certain assets with a valuation discount and the value of your total wealth. If you have a spouse or registered partner, the deduction for debt will be reduced based on both your total assets and debt and those of your spouse/partner.

Peter Hansen has debts of NOK 1,800,000 as of 1 January 2019. He has a tax value before the valuation discount of NOK 6,000,000.
He owns the following assets:

  • Primary dwelling with 75 percent valuation discount
  • Units in mutual funds with a 25 percent valuation discount as of 1 January 2019
  • Bank deposits (other capital) which doesn't entitle him to a valuation discount.

The debt you receive a deduction for has been reduced by NOK 30,000 in this case. In order to arrive at this figure, the debt of NOK 1,800,000 has been allocated between the assets. The share of the debt relating to the mutual fund units amounts to NOK 300,000. This part has been reduced by 10 percent based on the valuation discount.  

 

Primary dwelling which must be valued at 25 percent

Mutual fund units which must be valued at 75 percent

Other capital which must be valued at full value

Total

Value before valuation discount

4,800,000

1,000,000

200,000

6,000,000

Share of total capital

80%

16.67%

3.33%

100%

Tax value

1,200,000 (25%)

750,000 (75%)

200,000 (100%)

2,150,000

Proportion 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)

225,000

(300,000 x 75%) = 225,000)

60,000

1,725,000

Taxable net wealth

- 240,000

525,000

140,000

425,000

 

 

 

 

 

 

Completing the tax return

You'll normally receive a tax return which has been pre-completed. Wealth in the form of real property will be entered after the valuation discount is deducted.

Wealth in the form of shares, equity certificates, share component of share savings accounts and share component of units in mutual funds will be pre-completed before the valuation discount. You shouldn't adjust these values downwards because the valuation discount will be deducted in your tax assessment.

You should not reduce debt which has been pre-completed in your tax return. This reduction will be done automatically in the tax assessment you'll receive. If you have debts that aren't pre-completed in the tax return, you must enter the full amounts. 

The table shows the types of assets and the applicable valuation discount:

Note! The valuation discount provided in the table does not take into consideration whether the tax value is reduced because you’ve documented a lower market value.

Assets

Explanation

Valuation discount in 2017

Valuation discount in 2018

Valuation discount in 2019

Primary dwelling on Mainland Norway

‘Primary dwelling’ means the dwelling where the owner has his or her address according to the National Registry at the end of the year.

 

75 percent

 

75 percent

75 percent

Secondary dwelling on Mainland Norway

This is other housing or housing units in a housing cooperative which cannot be characterised as a primary dwelling or holiday home. The land register (the country's official register of real property) will normally state what is regarded as a residential property and what is regarded as a holiday home.

Wealth in the form of housing on Svalbard or abroad will be determined according to the rules for holiday homes in Norway instead.

You should generally consider multi-unit residential buildings to be secondary dwellings. However, if you live in one of the housing units at the end of the year, you'll be entitled to a valuation discount as the primary dwelling for the housing unit in which you live.

 

 

 

 

 

 

 

10 percent

 

 

 

 

 

 

 

10 percent

10 percent

Commercial property on Mainland Norway and let commercial property on Svalbard or abroad

The following are considered to be commercial property

  • office premises
  • retail outlets
  • warehouses
  • production premises/factories
  • multi-storey car parks
  • workshops
  • land areas which you let as part of your commercial enterprise
  • holiday homes which you let as part of your commercial enterprise

However, you should not consider housing, power stations, agricultural property and forestry property as commercial property in this context.

 

 

 

 

 

 

20 percent

 

 

 

 

 

 

20 percent

25 percent

Unlet commercial property on Svalbard or abroad

 

10 percent

20 percent

 

Agricultural and forestry property

 

 

10 percent

 

20 percent

25 percent

Power stations

 

10 percent

20 percent

 

Other real property in income-generating activity

This applies to the following when subject to accounts-based assessment

  • housing or housing occupancy right on Svalbard or abroad
  • land
  • holiday homes, but not if you let the property as part of a commercial enterprise which you run

The property will be subject to accounts-based assessment if you are required to submit RF-1189 Letting etc. of real property in order to specify your rental income and property expenses.

10 percent

20 percent

 

Shares in a business assessed as a partnership

This is positive net wealth from

  • RF-1221 Deltakerens melding over egen formue og inntekt i selskap med deltakerfastsetting (Partner's statement of assets and income in business assessed as a partnership - in Norwegian only), item 1101
  • RF-1246 Deltakerens melding over formue og inntekt i NOKUS 2017 (Partner's statement of assets and income in NOKUS 2017 - in Norwegian only), item 101

 

 

 

 

 

10 percent

 

 

 

 

 

20 percent

25 percent

Shares etc.

This covers

  • Shares
  • Equity certificates with savings banks
  • Share component of share savings accounts

However, you wont be entitled to the valuation discount for convertible bonds, share options or subscription rights to shares

 

 

 

10 percent

 

 

 

20 percent

25 percent

Share component of units in mutual funds

If you own shares in a combination fund, you'll be entitled to the valuation discount for the proportional share of the fund's assets which have been invested in shares.

 

10 percent

 

20 percent

25 percent

Other fixed assets in income-generating activity

The valuation discount will be deducted from the values which are entered in the following items of the tax return:

  • 4.4.1 Vehicles, machinery, fixtures and fittings etc.
  • 4.4.4 Ships, fishing and whaling/sealing vessels
  • 4. 5. 4 Capital value of capitalised ground rent
  • 4.5.4 Rights linked to forest/uncultivated land (RF-1177)
  • 4.5.4 Other capital within income-generating activity

However, you wont be entitled to the valuation discount for inventory and receivables.

 

 

 

 

 

10 percent

 

 

 

 

 

20 percent

25 percent

 

Item no.

Heading 2018

Remarks

4.1.4

Capital value of units in mutual funds - share component

Value before valuation discount

4.1.4

Capital value of units in mutual funds belonging to children aged 16 or under - share component

Value before valuation discount

4.1.4

Capital value in mutual funds - share component (RF-1159)

Value before valuation discount

4.1.8

Capital value of share savings account - share component

Value before valuation discount

4.1.8

Capital value Norwegian shares (RF-1159)

Value before valuation discount

3.1.5/
4.1.8

Taxable dividend/value transferred from RF-1088 The Shareholder's tax report

Value before valuation discount

4.1.7

Capital value of listed Norwegian shares (in VPS)

Value before valuation discount

4.2.3 Capital value of fixtures and movable property by rent Value before valuation discount

4.3.2

Housing

Value after valuation discount. Only the housing type ‘secondary dwelling’ entitles you to debt reduction

4.3.2

Housing units in a housing cooperative

Value after valuation discount. Only the housing type ‘secondary dwelling’ entitles you to debt reduction

4.3.2

Multi-unit building

Value after valuation discount. Only the housing type ‘secondary dwelling’ gives entitlement to debt reduction

4.3.4

Forest property

Value after valuation discount

4.3.5

Farms

Value after valuation discount

4.3.5

Norwegian commercial property (RF-1098)

Value after valuation discount

4.3.5

Other real property within income-generating activity

Value after valuation discount

4.4.1

Vehicles, machinery, fixtures and fittings etc. (RF-1175 or
RF-1167)

Value before valuation discount

4.4.1

Vehicles, machinery, fixtures and fittings etc. (Business Tax Return)

Value before valuation discount

4.4.4

Ships, fishing and whaling/sealing vessels

Value before valuation discount

2.7.8/
4.5.4

Sum income/net capital share in NOKUS companies
(RF-1246)

Value before valuation discount

4.5.4

Sum share of net capital in KS, ANS etc. (RF-1221)

Value before valuation discount

4.5.4

Share of joint net capital in KS, ANS etc.

Value before valuation discount

4.5.4

Other capital within income-generating activity

Value before valuation discount

4.5.4

Capital value of capitalised ground rent

Value before valuation discount

4.5.4

Rights linked to forest/uncultivated land (RF-1177)

Value before valuation discount

4.6.1

Real property abroad

Only applies to properties liable for wealth tax in Norway. Value after valuation discount for the property types

  • Housing subject to accounts-based assessment
  • Holiday property subject to accounts-based assessment
  • Farms
  • Forestry
  • Other real property within income-generating activity
  • Let multi-unit building

4.6.1

Real property in Svalbard

Value after valuation discount for the property types

  • Holiday property subject to accounts-based assessment
  • Farms
  • Other real property within income-generating activity
  • Housing subject to accounts-based assessment

4.6.1

Let foreign commercial property (RF-1098)

Value after valuation discount.

4.6.2

Capital value of foreign shares (RF-1159)

Value after valuation discount.

4.6.2

Capital value of foreign shares in the central securities depository (VPS)

Value before valuation discount

     
footer/desktop/standard