This is an archived release.
Extended use of property tax in the municipalities
Property tax was a source of revenue for 293 municipalities in 2008. Property tax contributed to 2.4 per cent of the municipalities’ total gross operating revenues in 2008, compared to 2.3 per cent in 2007.
The municipalities had total revenues of NOK 6.2 billion from property tax in 2008, compared to NOK 5.6 billion in 2007.
In 2008, 293 municipalities chose to acquire property tax as a source of income compared to 272 municipalities in 2007. Of this, 145 municipalities imposed property tax on mills and factories, while 65 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 83 municipalities chose to acquire property tax in the municipality as a whole; an increase of 28 municipalities since 2007. There were thus 148 municipalities that had property tax on residential property compared to 135 in 2007. In total, 137 municipalities responded that they did not impose property tax in 2008.
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.
Increased revenue from property tax
The municipalities’ income acquired from property tax increased by about NOK 620 million from 2007 to 2008. Property tax accounted for 2.4 per cent of the total gross operating revenues compared to 2.3 per cent in 2007. Income from property tax is divided into two categories; mills and factories and other real estates. In 2008, property tax from mills and factories amounted to 60.1 per cent or about NOK 3.7 billion, whereas 39.9 per cent or just about NOK 2.5 billion was derived from other real estates. Income from other real estates has slightly increased compared to the previous year.
Revenues from property tax are on average NOK 21.1 million for each of the 293 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 NOK 2 188 in property tax in 2008, compared to NOK 1 990 in 2007. 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 on mills and factories or from other real estates.
General tax rates, differentiated tax rates, basic deductions and exemptions for new houses
In 2008, the average tax rate was 5.9 per thousand, compared to 6.1 per thousand in 2007. 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 33 municipalities have chosen to have a differentiated tax rate for residential homes and vacation properties. Sixty-two municipalities have a basic tax deduction for residential homes and vacation properties, while 71 municipalities exempt new houses from property taxation.
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’).
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, 427 municipalities reported their accounts and 430 answered questionnaire 33 in 2008. 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.