More property tax payers in municipalities
Property tax was a source of revenue for 316 municipalities in 2011. The municipalities had total revenues of NOK 7.6 billion from property tax in 2011. Property tax therefore made up 2.4 per cent of the municipalities’ total gross operating revenues.
The municipalities had total revenues of NOK 7.6 billion from property tax in 2011, compared to NOK 7.1 billion in 2010.
In 2011, 316 municipalities chose to use property tax as a source of income compared to 309 municipalities in 2010. Of this, 116 municipalities imposed property tax on mills and factories, while 25 municipalities chose to use property tax from both the areas used for mills and factories and areas built with town-like features. A total of 163 municipalities chose to use property tax in the municipality as a whole; an increase of 18 municipalities since 2010. There were thus 188 municipalities that had property tax on residential property compared to 180 in 2010. In total, 114 municipalities responded that they did not impose property tax in 2011.
Increased revenue from property tax
The municipalities’ income acquired from property tax increased by about NOK 451 million from 2010 to 2011. Property tax accounted for 2.4 per cent of the total gross operating revenues. Income from property tax is divided into two categories; other property and residential homes and holiday properties. In 2011, property tax from other real estate amounted to 58.4 per cent or about NOK 4.4 billion, whereas 41.6 per cent, or just about NOK 3.1 billion, was derived from residential homes and holiday properties.
Revenues from property tax are on average NOK 24 million for each of the 316 municipalities that had imposed the tax. On average, the owner of a house measuring 120 square metres located close to the municipality’s centre paid approximately NOK 2 700 in property tax in 2011, compared to about NOK 2 600 in 2010. There are significant differences in how much income municipalities generate from property tax. The variation arises from whether they acquire the revenues from property taxes charged from other property or from residential homes and holiday properties.
General tax rates, differentiated tax rates, basic deductions and exemptions for new houses
In 2011, the average tax rate was 5.9 per thousand, the same as in 2010. The general tax rate is set to a minimum of 2 per thousand and a maximum of 7 per thousand. The municipalities themselves can determine the level of tax rate payable. A total of 65 municipalities have chosen to have a differentiated tax rate for residential homes and holiday properties. Eighty-six municipalities have a basic tax deduction for residential homes and holiday properties, while 73 municipalities exempt new houses from property taxation.
Property tax is a municipal tax that each individual municipality drafts in accordance with the property tax law of June 1975 no. 29 (‘ eigedomsskattelova ’). According to this legislation, it is the municipal council that decides whether to impose property taxes in the municipality. The municipal council can decide to impose property taxes in areas with mills and factories, areas built with town-like features or in both of these areas. With effect from 2007, the property tax law (‘ eigedomsskattelova ’) was changed such that the municipalities have the option to impose property tax in the whole municipality. From 2011, the municipalities can acquire property tax only on commercial property (such as industry, shopping centres etc).
About the statistics
KOSTRA data for property tax are reported through file extracts from the municipal accounts and questionnaire 33: “Property tax in the municipalities”. As from 2007, property tax has been registered under two types, 874 (‘use of mills and factories’) and 875 (‘other property’). Before 2007, all property taxes were registered under type 874 (’property tax’). From the year 2009, the contents and names of the two types that the municipalities shall report property taxes for have been changed. From the year 2009 the new names for these will be 874 “property taxes from other property” and type 875 “property taxes from residential and holiday properties”. The contents of type 875 have now changed such that it will only consist of property taxes paid from residential and holiday properties. Property taxes from office properties, service industry properties and other permanent properties that previously were registered on type 875 will be registered on type 874. Property taxes from all other properties including mills and factories will now be registered on type 874.
Questionnaire 33 “Property tax in the municipalities” has been answered for the first time by the municipalities in 2008 (for accounting year 2007). In the questionnaire, the municipalities report among other things whether they impose property tax, the general tax rate, basic tax deductions and property tax charged on a home equivalent to 120 square metres located in the city centre.
Out of 430 municipalities, 424 municipalities reported their accounts and 430 answered questionnaire 33 for 2010.