Wealth tax in Norway (Formuesskatt) - what is it and who pays it? 2025

Podatek od majatku (Norwegian formuesskatt) is a Norwegian tax charged on an individual's net wealth at the end of the tax year. It covers the value of assets owned minus debts - for example money in bank accounts (bankinnskudd), shares (aksjer), vehicles (e.g. a car) and real estate (fast eiendom). This tax is paid every year if net wealth exceeds the set tax-free threshold. Formuesskatt in Norway is collected at two levels: part of the tax goes to the municipality, and part to the state budget.

Who is subject to Norwegian formuesskatt?

Wealth tax applies to individuals whose net wealth (nettoformue) exceeds the tax-free amount. This means that if the total value of owned property, savings and other assets is greater than liabilities (debts), then so-called skattepliktig formue - taxable wealth - arises. In practice, formuesskatt therefore affects wealthier people whose net wealth exceeds 1.76 million NOK (the limit for a single person, details below). People with lower wealth do not pay this tax at all, because their formue falls below the exemption threshold.

As a rule, formuesskatt applies to tax residents of Norway and non-residents who own assets in Norway. Tax residents in Norway must declare and tax their entire worldwide wealth - regardless of whether it is in Norway or abroad. Non-residents, on the other hand, are subject to formuesskatt only on assets located in Norway. In other words, if a person living permanently abroad owns, for example, a home or money in a Norwegian bank account, they will pay wealth tax in Norway on that value, but assets located outside Norway will not be taxed in Norway.

Tax-free allowance and formuesskatt rates (2023-2025)

Norwegian wealth tax has a set tax-free allowance (fribelop, also known as grensebelop or bunnfradrag) and progressive tax rates. Below are the applicable thresholds and rates for 2023, 2024 and 2025:

2023: The tax-free allowance is 1 700 000 NOK for a single person (for spouses assessed jointly - 3 400 000 NOK in total). Net wealth up to this amount is tax-free. The amount above 1.7 million NOK is taxed at 1.0% (including 0.7% municipal tax and 0.3% state tax). In addition, a higher state rate applies to the part of wealth exceeding 20 million NOK, increasing the total tax to 1.1% on the amount above 20 million NOK (0.7% municipality + 0.4% state).
2024: The thresholds and rates remained unchanged compared with 2023. The tax-free allowance is still 1 700 000 NOK (3 400 000 NOK for couples). The tax rate on the amount above the threshold is 1.0% (0.7% municipality + 0.3% state), and for the part of wealth exceeding 20 000 000 NOK - 1.1% (0.7% + 0.4%).
2025: In 2025, the tax-free allowance was increased to 1 760 000 NOK (3 520 000 NOK for spouses in total). The split between municipality and state rates was also changed - the municipal tax was reduced to max. 0.525%, while the state tax was increased to 0.475% on wealth above the threshold up to around 20.7 million NOK and 0.575% for wealth above around 20.7 million NOK. The combined rate, however, remained at 1.0% of wealth above the tax-free allowance (and 1.1% for the part exceeding the second threshold of around 20.7 million NOK).

It is worth emphasising that the above rates combine municipal and state tax. The municipal part was 0.7% for 2023-2024, and from 2025 it is 0.525%. The state tax rates in 2023-2024 were 0.3% for wealth above the basic threshold and an additional 0.1 percentage point (i.e. 0.4% in total) for the part of wealth above 20 million NOK. In 2025, the state rates increased to 0.475% and 0.575% (respectively for the band above the basic threshold and for wealth >20.7 million NOK), while the municipal rate was reduced.

Calculating net wealth and the value of individual assets

The basis for formuesskatt is a person's net wealth at the end of the year (as at 31 December). Net wealth (nettoformue) is calculated as the total value of owned assets minus debts. Assets include, among other things, real estate, money in bank accounts, shares, vehicles and other valuable property. If the value of assets exceeds liabilities, a positive net wealth subject to tax arises (if it exceeds the tax-free allowance, as mentioned above).

Importantly, for tax purposes many assets are valued under special rules, often below market value. The tax value of real estate for formuesskatt purposes is called ligningsverdi (an assessed value determined by the tax office) and is usually only a fraction of market value:

For a home or flat that is the taxpayer's main residence (primærbolig), around 25% of market value is used - meaning a 75% reduction in the tax base for that property. However, if the value of such a primærbolig exceeds 10 million NOK, the amount above 10 million is counted at 70% of value (i.e. with a smaller 30% reduction).
By comparison, additional homes/flats (sekundærbolig, e.g. a rental flat or second property) are counted at 100% of value - there is no tax reduction here.
Equity interests such as shares and holdings in companies (including the value of commercial property owned through companies) are included in the base at 80% of their value (20% discount).

How do you calculate wealth for formuesskatt?

To calculate your net wealth for formuesskatt purposes, you need to add up the value of individual assets according to the relevant valuation rules and then subtract your liabilities (debts) from that total.

In most cases, full market value is not used - so-called verdsettingsrabatter (valuation discounts) apply. This is how it works in practice in 2023 and 2024:

Property where you live (primærbolig) below 10 million NOK: 25% of market value
Primærbolig above 10 million NOK: the part above 10 million counted at 70%
Holiday home (fritidsbolig) in Norway: 100% of market value
Foreign property: first counted at 30% of market value, and then at 80% of that amount.
Other property (sekundærbolig): 100% of market value (no reduction)
Shares, bonds, investment funds: 80% of value
Money in bank accounts and cash: 100%
Cars, motorcycles, boats: 100%
Cryptocurrency portfolios: 100% of market value on 31 December

What about loans?

Debts (e.g. a mortgage) are deducted from wealth, but only proportionally to the financed asset. Example: if you have a loan on a primærbolig, you deduct that part from the value of the primærbolig, calculated at 25%. If you have a personal loan, you can deduct it from your total wealth.

Formula for net wealth:

(Value of assets x relevant percentages) - (Value of debt x relevant percentages) = net wealth (formue)

If net wealth exceeds the tax-free allowance - you pay formuesskatt on the excess.

Example of calculating wealth tax

To illustrate how wealth tax works, let us consider a hypothetical example. Suppose Mr Jan is a tax resident of Norway and owns the following assets:

Detached house (his primærbolig) with an estimated market value of 5 000 000 NOK. For formuesskatt purposes, its ligningsverdi is 25% of that amount, i.e. 1 250 000 NOK (we assume the house value does not exceed the 10 million NOK threshold).
Savings in a bank account of 500 000 NOK.
Passenger car worth 200 000 NOK.
No debts (we assume Mr Jan has repaid all loans, so his liabilities = 0).

The total gross value of Mr Jan's assets is the sum of the above assets: 1 250 000 + 500 000 + 200 000 = 1 950 000 NOK. As he has no debts, his net wealth is also 1 950 000 NOK. The tax-free allowance is 1.76 million NOK (the threshold for a single person in 2025). The excess above this threshold is therefore 1 950 000 - 1 760 000 = 190 000 NOK.

Wealth tax will be calculated only on this excess. In 2025, the rate of 1.0% applies to wealth above the threshold (up to 20 million NOK). Therefore Mr Jan will pay an annual wealth tax of approx. 1 900 NOK (that is 1% of 190 000 NOK). This amount is split between municipal and state tax - 0.525% (997.5 NOK) will go to the municipality budget, and 0.475% (902.5 NOK) to the state budget. If Mr Jan's wealth did not exceed 1.76 million NOK, he would not pay formuesskatt at all (the tax-free allowance protects people with lower wealth from this tax).

Formuesskatt in Norway and the situation in Poland

An interesting point for Polish taxpayers is that Poland does not have an equivalent of Norway's tax on total personal wealth. Poland (like most countries, e.g. Sweden, Denmark or Italy) does not apply an annual tax on the value of net wealth owned. Of course, there are other property-related taxes - for example property tax in Poland, levied by municipalities, but it is of a completely different nature (it is charged on the area of the property at fixed rates, regardless of market value).

There is no tax in Poland that taxes a person's entire private wealth above a certain amount, as is the case in Norway. That is why wealth tax (formuesskatt) in Norway is a unique arrangement that Polish tax residents encounter only when starting a business or working in Norway.

Do you have questions about wealth tax or other taxes in Norway? Or do you need help with your annual tax return?

Author of the article: Marcin - marcin@efirma.no