Extended use of property tax in municipalities

PropertyTax

Property tax was a source of revenue for 299 municipalities in 2009. The municipalities had total revenues of NOK 6.5 billion from property tax in 2009. Property tax then contributed to 2.3 per cent of the municipalities’ total gross operating revenues.

The municipalities had total revenues of NOK 6.5 billion from property tax in 2009, compared to NOK 6.1 billion in 2008.

In 2009, 299 municipalities chose to acquire property tax as a source of income compared to 291 municipalities in 2008. Of this, 133 municipalities imposed property tax on mills and factories, while 54 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 112 municipalities chose to acquire property tax in the municipality as a whole; an increase of 33 municipalities since 2008. There were thus 166 municipalities that had property tax on residential property compared to 145 in 2008. In total, 131 municipalities responded that they did not impose property tax in 2009.

Increased revenue from property tax

The municipalities’ income acquired from property tax increased by about NOK 375 million from 2008 to 2009. Property tax accounted for 2.3 per cent of the total gross operating revenues; almost the same as in 2007. Income from property tax is divided into two categories; other real estate and residential homes and vacation properties. In 2009, property tax from other real estate amounted to 58.4 per cent or about NOK 3.8 billion, whereas 41.6 per cent or almost NOK 2.7 billion was derived from residential homes and vacation properties.

Revenues from property tax are on average NOK 21.7 million for each of the 299 municipalities that had imposed the tax. On average, the owner of a house measuring 120 square meters located close to the municipality’s center paid NOK 2 336 in property tax in 2009, compared to NOK 2 194 in 2008. 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 2009, the average tax rate was 5.9 per thousand, compared to 6.0 per thousand in 2008. 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 41 municipalities have chosen to have a differentiated tax rate for residential homes and vacation properties. Seventy-five municipalities have a basic tax deduction for residential homes and vacation properties, while 75 municipalities exempt new houses from property taxation.

Source: Statistics Norway

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