This is an archived release.
Extended use of property tax in municipalities
Property tax was a source of revenue for 309 municipalities in 2010. The municipalities had total revenues of NOK 7.1 billion from property tax in 2010. Property tax then contributed to 2.4 per cent of the municipalities’ total gross operating revenues.
The municipalities had total revenues of NOK 7.1 billion from property tax in 2010, compared to NOK 6.5 billion in 2009.
In 2010, 309 municipalities chose to acquire property tax as a source of income compared to 299 municipalities in 2009. Of this, 129 municipalities imposed property tax on mills and factories, while 35 municipalities chose to acquire property tax from both the areas used for mills and factories and areas built with town-like features. A total of 145 municipalities chose to acquire property tax in the municipality as a whole; an increase of 33 municipalities since 2009. There were thus 180 municipalities that had property tax on residential property compared to 166 in 2009. In total, 121 municipalities responded that they did not impose property tax in 2010.
Increased revenue from property tax
The municipalities’ income acquired from property tax increased by about NOK 613 million from 2009 to 2010. Property tax accounted for 2.4 per cent of the total gross operating revenues. Income from property tax is divided into two categories; other real estate and residential homes and vacation properties. In 2010, property tax from other real estate amounted to 57.5 per cent or about NOK 4.1 billion, whereas 42.5 per cent, or just about NOK 3 billion, was derived from residential homes and vacation properties.
Revenues from property tax are on average NOK 23 million for each of the 309 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 2 600 in property tax in 2010, compared to about NOK 2 300 in 2009. There are significant differences in how much income municipalities acquire from property tax. The variation arises from whether they acquire the revenues from property taxes charged from other real estates or from residential homes and vacation properties.
General tax rates, differentiated tax rates, basic deductions and exemptions for new houses
In 2010, the average tax rate was 5.9 per thousand, the same as in 2009. The general tax rate is set to a minimum of 2 per thousand and a maximum of 7 per thousand. The municipalities can determine the level of tax rate payable themselves. A total of 31 municipalities have chosen to have a differentiated tax rate for residential homes and vacation properties. Eighty-four municipalities have a basic tax deduction for residential homes and vacation properties, while 76 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.
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 real estate’). 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 real estates” and type 875 “property taxes from residential and vacation properties”. The contents of type 875 have now changed such that it will only consist of property taxes paid from residential and vacation properties. Property taxes from office properties, service industries 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, 426 municipalities reported their accounts and 430 answered questionnaire 33 for 2010. In 2007, 410 municipalities reported questionnaire 33 and several of the municipalities left 2 questions unanswered: (1) What year did the last general assessment take effect? and (2) Does the municipality have property tax exemption for new houses? The response rates are low for these questions.