Acquiring Norwegian real estate

DIRECT PURCHASE OF REAL ESTATE

Resident and non-resident individuals, companies, and/or other legal entities are legally entitled to own and invest in real estate in Norway.

This section discusses the most important tax implications of the direct purchase of real estate. Firstly, the impact for resident individuals and non-resident individuals. Thereafter, the impact for resident companies and non-resident companies.

Resident lndividuals

Transfer Taxes - Stamp duty
Anyone acquiring Norwegian real estate who wants to register their ownership, is subject to stamp duty of 2.5% on the fair market value at the time the transfer takes place. There are no other transfer taxes in Norway.

Value added tax
The transfer of real estate is exempt from VAT in accordance with the Norwegian VAT legislation, conversely no VAT is added to the acquisition price. Furthermore, VAT on construction costs related to a new or existing building is not deductible if the property is intended for sale.

However, an exemption is cost related to the construction of a building that will become an asset in a business liable to VAT; this gives the business right to deduct input VAT. 

Deductibility of costs
Cost related to the purchase of real estate, must as a main rule be activated and depreciated along with the purchase price. Residential property is thus not depreciated for tax purposes. Costs related to maintenance can be deducted directly and are not subject to depreciation.

Non-resident individuals

Non-resident individuals are treated in the same manner as resident individuals.

Treatment of purchase price
The purchase price must be capitalised for tax purposes and distributed among different asset groups for commercial buildings and technical facilities. Deductions are achieved through annual depreciation, depending on the depreciation rate of the different asset groups.

Transfer Taxes - Stamp duty
Anyone acquiring Norwegian real estate, and who wants to register their ownership, is subjected to stamp duty of 2.5% on the fair market value at the time the transfer takes place. There are no other transfer taxes in Norway.

Value added tax
The transfer of real estate is exempt from VAT in accordance with the Norwegian VAT legislation, conversely no VAT is added to the acquisition price. Furthermore, VAT on construction costs related to a new or existing building is not deductible if the property is intended for sale.

However, an exemption is cost related to the construction of a building that will become an asset in a business liable to VAT; this gives the business right to deduct input VAT.

Deductibility of costs
Cost related to the purchase of real estate, must as a main rule be activated and depreciated along with the purchase price. Residential property is thus not depreciated for tax purposes. Costs related to maintenance can be deducted directly and are not subject to depreciation.

Non-resident companies

Non-resident companies are treated in the same manner as resident companies.

INDIRECT PURCHASE OF REAL ESTATE

This section discusses the most important tax implications of the indirect (shares) acquisition of real estate. Firstly, the impact for resident individuals and non-resident individuals. Thereafter, the impact for resident companies and non-resident companies.

Resident individuals

Treatment of purchase price
The purchase price must be capitalised for tax purposes on the shares purchased, without any depreciations or other form of deductions.

Transfer taxes - Stamp duty
When purchasing shares, there is no change in ownership to the real estate itself. Therefore, no registration of new ownership is needed, and no stamp duty applies. There are no other transfer taxes in Norway.

Deductibility of costs
Costs related to the purchase of shares, must as a main rule be activated on the shares along with the purchase price.

Non-resident individuals

Non-resident individuals are treated in the same manner as resident individuals.

Resident companies

Treatment of purchase price
The purchase price must be capitalised for tax purposes on the shares purchased, without any depreciation or other forms of deductions.

Transfer taxes- Stamp duty
When purchasing shares, there is no change in ownership to the real estate itself. Therefore, no registration of new ownership is needed, and no stamp duty applies. There are no other transfer taxes in Norway.

Deductibility of costs
Costs related to the purchase of shares, must as a main rule be activated on the shares along with the purchase price.

Non-resident companies

Non-resident companies are treated in the same manner as resident companies.

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