Property tax in Norway (Norwegian eiendomsskatt) is a local property tax levied by municipalities. Its primary purpose is to provide additional revenue to the municipal budget to finance municipal services and local investments (e.g., schools, infrastructure).
The introduction of this tax is optional – The decision on whether a given municipality will collect property tax is made by the local government (municipal council) in a budget resolution. In practice, however, most Norwegian municipalities take advantage of this option – currently, only 32 of 357 municipalities do not collect property tax (as of 2025). This tax is a direct contribution to the municipal treasury and is not shared with the state budget (it is a separate local revenue).
Who has to pay property tax?
They pay property tax property owners located within the municipality that has decided to introduce this tax. This applies primarily to private individuals owning residential houses, apartments, summer cottages (hytte), or building plots.
Property tax applies to both individuals and companies. Businesses owning real estate (e.g., office buildings, warehouses, commercial land) must also pay this tax under the same local rules. However, they are not eligible for any tax-free allowances, which often apply only to private homes (municipalities cannot provide tax relief for portions of real estate used for business purposes).
Tenants (people renting apartments) do not pay this tax directly - the obligation rests with the property owner, although the cost of the tax may be indirectly included in the rent.
Tax amount and method of calculation
How much is property tax in Norway? There is no single, universal nationwide rate. Therefore, the tax rate depends on the decisions of local municipal authorities.
Norwegian law, however, provides certain limits. The Property Tax Act specifies that the annual rate must be between 0,1% and 0,7% of the property's value. Importantly, a lower maximum of 0,4% applies to residential and recreational properties. Each municipality sets a specific rate within this range each year when adopting its budget. In practice, rates for single-family homes often range around 0,2% to 0,4% of the value.
The tax base is value of the property, with the regulations providing for certain reliefs and methods for determining this value. For residential buildings and holiday homes, only 70% of the market value is currently taxable – in other words, a 30% relief on the full market value is already included.
Many municipalities use the estimated values of the Norwegian Tax Agency (Skatteetaten) based on statistical data on real estate prices. Information about this calculated market value (beregnet markedsverdi) appears on the owner's tax return.
Alternatively, the municipality may carry out its own valuation (appraisal) real estate – the approach varies depending on the municipality. The final tax amount is calculated according to the formula:
- Tax rate – for example, a rate of 0,3% means a tax of NOK 3 per NOK 1000 of property value per year. For the first year after the tax is introduced, the rate cannot exceed 0,1%, and any increases are limited to a maximum of +0,1% per year to protect taxpayers from sudden tax increases.
- Property value (boligverdi) – the estimated market value of a house, apartment, or plot of land. For tax purposes, the value as of January 1st of the given tax year is assumed, often based on a mass valuation from the tax office from two years ago (e.g., the 2025 tax was based on the value from the 2023 tax return). This allows for the inclusion of current data, but with a certain delay. The aforementioned 70% of market value is applied at this stage – only 70% of the estimated market price constitutes the tax base for private homes.
- Tax-free allowance (bunnfradrag) – A municipality has the option of introducing a tax-free allowance for each household (independent residential unit). This is a fixed amount in kroner (NOK) by which the property's value is reduced when calculating tax. For example, if a municipality sets a tax-free allowance of NOK 300, NOK 000 will be deducted from the home's value before tax is charged. This tax-free allowance applies only to houses and apartments used for private purposes – it does not apply to commercial properties or residential parts used for business purposes. Not all municipalities implement it, but many choose this NOK to provide relief to owners of lower-value properties. As a result, some owners of small apartments may not pay property tax at all if the value of their property falls entirely within the tax-free allowance.
Calculation example
House with market value NOK 3 is located in a commune that:
- It set the tax rate at 0,3%
- Uses Skatteetaten valuation (market value x 70%)
- It applies the tax-free amount of 500 000 NOK
Step 1: Calculating the tax base
70% of NOK 3 = 2 450 000 NOK (taxable value of property)
Step 2: Deducting the tax-free amount
2 450 000 NOK – 500 NOK = 1 950 000 NOK (final basis for calculating tax)
Step 3: Calculating Tax
1 950 000 NOK x 0,003 = 5 850 NOK
The annual property tax for a property with a market value of NOK 3 is NOK 500.
How does payment take place?
Property tax is calculated and collected by municipal authorities. They issue tax decisions calculating the value, rate, and amount of tax due.
Payment is usually made in installments throughout the year (e.g., quarterly). Importantly, if the calculated tax amount for a given property is very low (below NOK 300 per year), the regulations exempt it from collection – in such a situation, the tax is not charged, nor should the municipality require it.
When do you not have to pay property tax?
There are several situations where an owner fails to pay property taxes. The most important case is the one already mentioned – if the commune did not introduce eiendomsskatt (taxation tax) in your municipality, then any property you own within its territory will not be subject to it. Similarly, if the municipality taxes only certain types of property (e.g., only commercial properties or only houses in urban areas) and your property does not fall into these categories, you will not pay tax either.
In municipalities that collect property tax, you can, however, avoid paying it. thanks to the tax-free amount (bunnfradrag)If the value of your house or apartment is so low that after deducting your taxable income tax, the tax base drops to zero, the tax will also be NOK 0. In other words, the tax-free allowance can protect owners of cheaper properties from being burdened with tax.
Some municipalities also apply temporary exemption for new residential buildingsUnder local resolutions, newly built single-family homes or apartments 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 a given area. However, such exemptions are not mandatory – they are a matter of goodwill on the part of the municipality. For example, Oslo Municipality does not apply any exemption period for new homes, while other municipalities have introduced multi-year exemptions (information about this can be found in the municipality's tax decision).
As we mentioned earlier, if the annual tax amount is less than NOK 300, the municipality, by law, does not charge it at all. In practice, this applies only in rare cases (e.g., symbolic shares in small plots), but it's worth knowing that such a minimum exists.
Municipalities without property tax
In Norway, there are 32 municipalities that will not collect property tax (eiendomsskatt) in 2025, according to SSB data as of June 16, 2025. These are:
- Asker
- Austevoll
- Bjornafjorden
- Baerum
- Drammen
- Dyrøy
- Enebakk
- Færder
- Fence room
- Hasvik
- Hole
- Hegebostad
- Huh
- Kárášjohka – Karasjok
- Clap
- Larvik
- Lier
- Nannestad
- Nordre Follo
- The railing
- Sande
- Sandefjord
- Sola
- Stjordal
- Sveia
- Søndre Land
- Southern journey
- Træna
- Tønsberg
- The vanilla river
- Axes
- Øvre Eiker
If you live in one of these municipalities, great, you don't have to pay property tax! However, if your municipality isn't on this list, it's worth checking the property tax rate where you live.
Property tax and wealth tax
Finally, it is worth distinguishing two issues: property tax (eiendomsskatt) and wealth tax (formuesskatt).
Property tax, the subject of this article, is a local levy levied by a municipality and constitutes municipal income in its entirety. Property tax, on the other hand, is a separate national tax on the taxpayer's excess net wealth, which also takes into account the value of real estate owned. Property tax applies to wealthier individuals – currently, approximately 10 percent of Norwegians with higher wealth pay it. About the property tax itself read here (click).
The main difference is that property tax revenues are divided between the state and municipalities. For example, in 2025, the property tax rate is 0,525% of surplus property for the municipality and 0,475% for the state. However, the entire property tax (eiendomsskatt) – regardless of the rate or value – goes solely to the budget of the municipality in which the property is located.
It's worth being aware of both of these charges, but not confusing them. If you own a home in Norway, you'll likely be paying eiendomsskatt to the commune, and if your assets exceed the national threshold, you will also pay Additionally formuesskatt, part of which will go to the state budget. However, these are separate taxes, regulated by different regulations.
Do you have questions about settling real estate or other taxes in Norway?
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Author of the article: Marcin – marcin@efirma.no
