What are the tax rules when you rent out a holiday home in Norway?

Making the most of your holiday home in Norway means more than just visiting it regularly, it may also mean renting it out to try and generate a bit of extra income.

This income can help offset some of the running costs. However, there are several tax rules you’ll need to be aware of.

For starters, whether you live in Norway or are considered a non-resident, you will be expected to pay some form of tax on the property - especially when it comes to rental income. 

READ ALSO: What taxes do foreign holiday homeowners in Norway pay?

What are the tax rules for rental incomes?

Firstly, if you are just thinking of renting out your property a few times a year, then it may fall under the rules for short-term lets.

In Norway, rental income up to 10,000 kroner from short-term rentals is tax-free, provided each rental period is less than 30 days. Therefore, you could rent out your holiday home for up to 10,000 kroner per year without paying any tax.

After this limit has been reached, 85 percent of income is taxable at a rate of 22 percent.

Say if you made 15,000 kroner renting out your holiday home, 10,000 would be tax-free. After that, 4,250 kroner of the 5,000 kroner would be taxable. You would then pay an income tax of 22 percent of the figure of 4,250 kroner.

For the property to fall under the short-term rules, you’ll need to meet several requirements. For starters, you will need to also use the property as a holiday home yourself.

How often you’ll need to visit the property yourself isn’t clear, so your first port of call should be the Norwegian Tax Administration.

Secondly, the home must have the characteristics of a holiday home, not a rental property. Theoretically, a home in a city centre surrounding residential properties wouldn’t fall under the short-term rental rules.

Should the property fail to meet these requirements, then it could fall under the tax rules for the renting out of holiday homes. Generally, the main thing you’ll need to know is that this income is taxable from the first krone, typically at a rate of 22 percent – and that deductions are available.

Are there any ways to avoid being taxed twice?

Those who are tax residents in another country will likely be put off by the potential prospect of being taxed twice, firstly by Norway and then by the country in which they live.

The good news is that Norway has tax treaties with several countries to avoid double taxation. This means that when you are taxed on rental income in Norway, you can obtain tax credits that may exempt you from paying tax again in the country in which you live.

However, for more detailed information, it is best to contact a tax advisor in the country where you live and a Norwegian expert.