What is property tax (eiendomsskatt) in Norway?

Property tax in Norway (Norw. eiendomsskatt) is a local wealth tax levied by municipalities. Its main purpose is to provide additional income to the municipal budget for funding public services and local investments (e.g. schools, infrastructure).

Introducing this tax is optional – the decision on whether property tax will be charged in a given municipality is made by the local council in the budget resolution. In practice, however, most Norwegian municipalities make use of this option – currently only 32 out of 357 municipalities do not charge property tax (as of 2025). This tax goes entirely to the municipal coffers from start to finish and is not shared with the state budget (it is a separate local revenue).

Who has to pay property tax?

Property tax is paid by owners of property located in a municipality that has decided to introduce this tax. This mainly applies to private individuals who own residential houses, flats, holiday homes (hytte) or building plots.

Property tax applies to both individuals and companies. Businesses that own property (e.g. office buildings, warehouses, commercial land) must also pay this tax under the same local rules. However, they are not entitled to any allowances such as a tax-free threshold, which often apply only to private homes (the municipality cannot grant an allowance for parts of property used for business activities).

Tenants (people renting flats) do not pay this tax directly – the obligation rests with the property owner, although the cost of the tax may indirectly be included in the rent.

Tax amount and how it is calculated

How much is property tax in Norway? There is no single nationwide rate. The amount therefore depends on decisions made by the local municipal authorities.

Norwegian law does, however, set certain limits. The Property Tax Act states that the annual rate must be between 0,1–0,7% of the property value. Importantly, for residential and recreational properties, a lower maximum applies – up to 0,4%. Each municipality sets the exact rate within this range every year when adopting the budget. In practice, rates for detached houses are often around 0,2–0,4% of the value.

The tax base is the property value, although the rules provide for certain allowances and methods of determining this value. For residential buildings and holiday homes, only 70% of the market value is currently taxed – in other words, a 30% allowance from the full market value is already taken into account.

Many municipalities use values estimated by the Norwegian Tax Administration (Skatteetaten) based on statistical data on property prices. Information about such a calculated market value (beregnet markedsverdi) appears on the owner’s tax return.

Alternatively, the municipality may carry out its own valuation (taksasjon) of the property – the approach varies from municipality to municipality. The final tax amount is calculated using the following formula:

• Tax rate – for example, a rate of 0,3% means tax of 3 NOK for every 1000 NOK of property value per year. In the first year after the tax is introduced, the rate may not exceed 0,1%, and any subsequent increases are limited to a maximum of +0,1% per year, to protect taxpayers from a sudden jump in tax.
• Property value (boligverdi) – the estimated market value of the house, flat or plot. For tax purposes, the value as at 1 January of the relevant tax year is used, often based on a mass valuation from the tax office from two years earlier (e.g. tax in 2025 is based on the value from the 2023 return) – this allows current data to be taken into account, but with a certain delay. The aforementioned 70% of market value is applied at this stage – only 70% of the estimated market price forms the tax base for private homes.
• Tax-free threshold (bunnfradrag) – the municipality may introduce a tax-free threshold for each household (a separate residential unit). This is a fixed amount in kroner by which the property value is reduced when calculating the tax. For example, if a municipality sets bunnfradrag at 300 000 NOK, then 300 000 NOK will be deducted from the value of the home before tax is calculated. The tax-free threshold applies only to houses and flats used privately – it does not apply to commercial property or residential parts used in business activities. Not all municipalities use it, but many choose to do so in order to ease the burden on owners of lower-value properties. As a result, some owners of small flats may not pay property tax at all if the value of their unit falls entirely within the tax-free threshold.

Calculation example

A house with a market value of 3 500 000 NOK is located in a municipality that:

• Has set eiendomsskatt at 0,3%
• Uses Skatteetaten’s valuation (market value x 70%)
• Applies a tax-free threshold of 500 000 NOK

Step 1: Calculate the tax base

70% of 3 500 000 NOK = 2 450 000 NOK (taxable property value)

Step 2: Deduct the tax-free threshold

2 450 000 NOK – 500 000 NOK = 1 950 000 NOK (final tax base)

Step 3: Calculate the tax

1 950 000 NOK x 0,003 = 5 850 NOK

The annual property tax on a property with a market value of 3 500 000 NOK is 5 850 NOK.

How is payment made?

Property tax is assessed and collected by the municipal authorities. They send tax decisions showing the value, rate and amount due.

Payment is usually split into instalments during the year (e.g. quarterly). Importantly, if the calculated tax amount for a given property is very low (below 300 NOK per year), the rules exempt it from collection – in such a case the tax is not charged and the municipality should not demand it.

When do you not have to pay property tax?

There are several situations in which the owner will not pay property tax. The most important case is the one already mentioned – if the municipality has not introduced eiendomsskatt, then none of your properties located there will be subject to it. Similarly, if the municipality taxes only selected types of property (e.g. only commercial property or only homes in urban areas), and your property does not fall into those categories, you will also not pay the tax.

In municipalities that do charge property tax, you may still not pay it thanks to the tax-free threshold (bunnfradrag). If the value of your house or flat is low enough that, after deducting the applicable bunnfradrag, the tax base falls to zero, the tax will also be 0 NOK. In other words, the tax-free threshold can protect owners of cheaper properties from the tax burden.

Some municipalities also apply a temporary exemption for new residential buildings. Under local resolutions, newly built detached houses or flats may be exempt from property tax for the first few years after completion (e.g. 2, 5 or even 20 years – depending on the municipality). This is intended to encourage construction and settlement in the area. Such exemptions are not mandatory, however – they are at the municipality’s discretion. For example, Oslo does not apply any exemption period for new homes, while other municipalities have introduced several-year exemptions (information about this is included in the municipal tax decision).

As mentioned earlier, if the annual tax amount is less than 300 NOK, the municipality does not charge it at all under the law. In practice this applies to only a few cases (e.g. symbolic shares in small plots), but it is worth knowing that such a minimum exists.

Municipalities without property tax

In Norway, there are 32 municipalities that do not charge property tax (eiendomsskatt) in 2025, according to SSB data as of 16 June 2025. These are:

• Asker
• Austevoll
• Bjørnafjorden
• Bærum
• Drammen
• Dyrøy
• Enebakk
• Færder
• Gjerdrum
• Hasvik
• Hole
• Hægebostad
• Hå
• Kárášjohka – Karasjok
• Klepp
• Larvik
• Lier
• Nannestad
• Nordre Follo
• Rælingen
• Sande
• Sandefjord
• Sola
• Stjørdal
• Sveio
• Søndre Land
• Sørreisa
• Træna
• Tønsberg
• Vanylven
• Øksnes
• Øvre Eiker

If you live in one of these municipalities – great, you do not have to pay property tax! If your municipality is not on this list, it is worth checking how much the tax rate is where you live.

Property tax and wealth tax

Finally, it is worth distinguishing between two matters: property tax (eiendomsskatt) and wealth tax (formuesskatt).

Property tax, which is the subject of this article, is a local levy imposed by the municipality and is entirely municipal revenue. Wealth tax, on the other hand, is a separate nationwide tax on a taxpayer’s net wealth above the threshold, and the value of owned property is also taken into account. Formuesskatt applies to wealthier individuals – currently around a dozen per cent of Norwegians with greater assets pay it. You can read about wealth tax here (click).

The main difference is that the revenue from wealth tax is shared between the state and the municipalities. For example, in 2025 the wealth tax rate is 0,525% of net wealth for the municipality and 0,475% for the state. By contrast, the entire property tax (eiendomsskatt) – regardless of the rate or value – goes only to the budget of the municipality where the property is located.

It is worth being aware of both charges, but not confusing them. If you own a home in Norway, you will probably pay eiendomsskatt to the municipality, and if your wealth also exceeds the national threshold, you will additionally pay formuesskatt, part of which will go to the state budget. These are separate taxes, governed by different rules.

Do you have questions about property tax or other taxes in Norway?

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