2.8.4 Taxable gains on the realisation (sale etc.) of property, land and other real property
Applies to the income year 2017
Under this item, you must enter your calculated taxable gains on the sale of real property, such as properties and plots of land. The general rule is that you have to pay tax on gains (profit) from the sale of property. There are many exceptions linked to the sale of a person’s home or holiday property, provided that certain requirements regarding period of residence/use and ownership are met. Any loss must be entered under item 3.3.6.
Does this item concern me?
Plots of land
Gains from the sale of plots are always taxable.
If you have sold a house/apartment with a gain, you must pay tax if you have
- used the house / apartment as your own home for less than 12 out of the last 24 months (period of occupancy), and/or
- owned the house/apartment for less than one year (period of ownership) before the sale or an agreement concerning the sale of the property was established. The period of ownership is through until an agreement concerning the sale (realisation) of the property is established.
In relation to the tax rules when selling a residential property, if you for some reason are prevented from residing on the property, you may still have a period of non-residence approved as a period of residence. Approval may be given if work or illness prevents you from residing on the property. More information on the rules concerning the sale of residential property.
If you have sold a holiday home with a gain, you must pay tax if you have
- used it as your own holiday home for fewer than five out of the last eight years (period of occupancy) before the sale, and/or,
- owned the holiday home for less than five years (period of ownership) before the sale. The period of ownership is determined from the date on which you took over the property. You will normally be considered to be the owner from the date on which you actually took possession of the holiday home.
Taxpayers who own commuter accommodation in addition to their own residential property can fulfil the period of residence at both homes simultaneously. If you have sold a residential property that you haven't used as commuter accommodation or as your own home in 12 of the last 24 months, and/or owned it for less than one year, you must pay tax on the gain.
Break-up of relationships
If a joint home is sold in connection with the break-up of a relationship between spouses or spouse-equivalent partners with shared children, the person who moves out will be credited with the same occupancy period as the person who remains in the home.
If a house that is sold with a taxable gain has several owners, the gain must be assessed for each individual owner and allocated between them in proportion to their respective shares.
Division of the property
If the property has a larger area than is considered to constitute a naturally associated plot, the sale of the property may be considered a sale of property/holiday home and plot of land. Gains on the sale of plots are always taxable.
If the sale concerns a number of freestanding buildings, consideration must be given to whether each building has sufficient affiliation to the dwelling in order to be considered part of the dwelling.
If you have used part of the dwelling as your own home and the rest as a taxable rental dwelling, each part must be considered separately. Gains on the sale of the rental part are taxable. Gains on the sale of the part that you use as your own home will be taxable if you haven't lived there for 12 of the past 24 months and/or owned it for less than one year.
How do I enter this in my tax return?
You must state the municipality to which the property belongs, the holding number (gårdsnummer), subholding number (bruksnummer) and the calculated gain. To help you calculate the gain/loss, you can use form RF-1318 Skjema for salg av bolig, fritidsbolig eller tomt (Sale of property, holiday home or plot - in Norwegian only). This form should not be attached to the tax return, but it can be sent to the tax office if a more detailed explanation is requested concerning how the gain/loss was calculated.
Calculating gains on the sale of real property
You can calculate the gain as follows:
If the result is negative, you must enter it under item 3.3.6 as a deduction. If it is positive, enter it under item 2.8.4 as a gain.
The input value is the amount you paid for the property when you purchased it or the value of the property when you inherited it. In addition, you can add certain expenses that are attributable to the purchase of the property, such as:
- estate agent expenses
- improvements (excluding maintenance)
- document tax
- registration fees
|hat you paid for the property/value upon inheritance|
|+||expenses in connection with the purchase/takeover|
If you built the property yourself, the cost price will form the basis for the input value. This covers both the expenses attributable to construction of the property and the costs of purchasing and preparing the plot for construction. The value of your own work linked to newbuilds or improvements can also be added to the input value. The value of your own work should 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, e.g. to the hourly rate for unskilled labour. You find the rates on the Norwegian Labour Inspection Authority’s website. (Note that the value of your own work must be recognised as income in the year in which the work is performed. Exceptions apply of course to work that you do on your own home or holiday home in your spare time).
If you inherited the property after 2014, the basis for the input value will be either the testator’s input value (in the case of continuity) or the estimated market value at the time you inherited the property (in the case of discontinuity). The market value at the time of inheritance will form the basis for the input value if the testator met the residential and ownership period requirements at the time of inheritance, and the property is a residential property or a holiday property. More information about discontinuity and continuity.
The output value is the value for which you sell the property. Costs linked to the sale, e.g. estate agent's commission, advertising costs, etc. reduces the output value.
You do not need to send us any documentation of your gain calculation, but you must be able to present documentation and/or the gain calculation if we ask to. This aslo applies to the documentation of purchases, expenses, improvements and expenses.