Do you live in Norway and own real estate in another Nordic country?
This applies to you who live in Norway and have real property in another Nordic country.
Taxation in Norway
Real property in another Nordic country is also taxable in Norway.
In Norway, both the capital value and income will be determined in accordance with Norwegian rules, regardless of how the property is taxed abroad.
A Norwegian tax value must always be established for real property abroad. For residential and holiday properties that have not previously had a tax value determined under Norwegian rules, the tax value is set to a maximum of 30 percent of the market value of the property abroad, or alternatively 30 percent of the construction costs, including the plot of land. For holiday properties there may be an annual percentage adjustments. For 2019 and 2020, there is no adjustment of the tax value.
The tax value is the basis for capital taxation.
If you have real property or other assets (i.e. shares) that has a lower tax value than 100 per cent of the market value, your deduction for debt may be reduced. You will find more information at skatteetaten.no.
The property value established by the tax authorities in the country where the property is situated is not to be used as a basis for Norwegian taxation.
Rental income from property abroad is taxable in Norway according to the same rules as apply to rental of real property in Norway.
If your rental income is fully or partly tax-free under Norwegian rules, you will not be allowed to deduct any costs related to the lease. You will also not be allowed a deduction for taxes paid in the country where the property is located. This applies to both property tax and ordinary income tax.
If you are taxed in Norway for income from a real property abroad by an accounting-assessment (i.e. the net income from letting your property is liable for tax), you may claim a deduction in your income for costs related to the lease and foreign property tax. If you have paid ordinary income tax on your rental income from real property in the other country, you may claim a deduction from your Norwegian tax for the income tax paid in the other country (credit). The tax deduction may not exceed the proportionate part of the Norwegian tax due on the income abroad.
You are not allowed a deduction in the Norwegian tax (no credit) for the following foreign taxes:
Sweden: Kommunal fastighetsavgift
You are entitled to a full deduction for debt interest in your tax assessment in Norway even if you have real property in another Nordic country. This also applies to debt interest relating to the foreign property and even if the loan has been raised in a foreign bank.
Capital gains on sale
Capital gains on the sale of real property in another Nordic country are taxable in Norway according to the same rules as apply capital gains on the sale of real property in Norway. Losses on the sale of real property in another Nordic country are tax-deductible if any gain would have been taxable.
Capital gains are also taxable in the country where the real property is located in accordance with the rules applying there.
If you are taxed for the gains in Norway, you may claim a deduction from your Norwegian tax for the foreign tax on the gains (credit). The tax deduction may not exceed the proportionate part of the Norwegian tax due on the income abroad.
If you have owned and used the property long enough to meet the requirements for tax-exempt gains, the gains are tax-exempt in Norway. In this case, you may not claim a deduction for tax paid on any gains in the country where the property is located; nor may you claim a deduction for any loss.
As the taxable gains are calculated according to both the rules in the country where the property is located and Norwegian rules, the amounts taxable in Norway and in the other country will differ.