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. The tax authorities use the market value in the country where the property is located as their basis. They therefore need information about the kind of property you have (holiday home, plot of land, etc.), which country it is in, when it was bought (date), purchase price and, if available, its market value. The ratio between the capital value and the market value will be approximately the same as in the municipality where you live in Norway.
The capital value will be used as a basis for wealth taxation.
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.
Taxable rental income from letting real property is to be determined in accordance with Norwegian rules in the same way as if the property was located in Norway.
If you are not taxed for any income from real property in Norway, you cannot receive a deduction for tax paid in the country where the property is situated. 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 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.
Property taxes and the like that may not be deducted from Norwegian taxes (no credit):
Property taxes and the like that may not be deducted from Norwegian taxes (no credit deduction):
Sweden: Kommunal fastighetsavgift
These taxes may be deducted from taxable income only when the property is subject to an accounting-assessment in Norway.
If you have real property subject to an accounting-assessment, you need to complete the form “Letting etc. of real property” (RF1189E) and submit it with your tax return.
You are entitled to a full deduction for debts and debt interest in your tax assessment in Norway even if your real property is situated in another Nordic country. This also applies to debts and 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 in accordance with Norwegian tax rules. 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.