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New tax rules on rent

From the income year 2008, the rules for tax on rental income have been changed. Gone is the so-called half-year rule, where the entire home could be rented out tax-free for up to six months.

New tax rules on rent

Tax Rules Housing Rentals

  • Rent of less than half of the property, based on rental value, is exempt from tax.
  • Rent of entire or larger part of the property for less than half a year is exempt from tax if the rent does not exceed NOK 20,000.
  • Renting a dwelling in a semi-detached house is not taxable if the landlord even lives in parts of the semi-detached house. In addition, up to half of the home the landlord may even live in, calculated in relation to rental value, is rented out tax-free.
  • Rent of more than half of a dwelling, based on rental value, will be taxable from the first crown. However, rental income may be deducted from maintenance costs before taxing.
  • Rentals for less than half a year are taxable if rental income exceeds NOK 20,000.
  • All rental income is taxed as capital income, by 28 per cent.
  • Further information: www. tax department. no /

Before, the rules were really simple when renting a home. If you rented less than half of it, your rental income was tax-free. The same was true if you rented all or part of it for less than half a year. This has now been changed. Now it is no longer the size of the home that is decisive for the tax exemption, but the rental value of the property. And the half-year rule has been removed and replaced with an exemption limit of 20,000 kroner.

Tax exemption

The tax rules distinguish between two types of housing, the free-equity and the accounting-like. Exemptions are simply homes where rental income is not taxed. In short, tax exemptions occur in the following circumstances:

  • The owner uses at least half of the home for his own use, based on rental value.
  • All or more of the property is rented for less than NOK 20,000 in the income year.

In addition, there are also tax exemptions in cases where the landlord owns a semi-detached house and rents out the one dwelling. This despite the fact that the apartment in which he lives, has a lower rental value than the one that is rented out. In addition, the landlord can also rent up to half of the home he lives in.

Taxation

Tax on rental income thus occurs when more than half of the property is rented, calculated according to the so-called rental value. The assumption is that the net rental income exceeds NOK 20 000, and then the entire amount is taxed. Net rental income means the total income less maintenance costs, which concerns necessary costs for maintaining the standard of the housing.

Tax liability also occurs in cases where the entire home is rented for parts of the income year and where the rental income exceeds NOK 20,000. In that case, the entire amount is taxed and no deduction for maintenance costs is deducted. The last thing is important to note.

Multi-family

A final situation where tax liability arises is when you own a so-called multi-family home. According to the Tax Agency’s website, it is defined as a dwelling consisting of three or more family apartments. Income from such rentals is always taxable, even if the landlord lives in more than half of the property (calculated by rental value).

Tax exemption

The tax rules distinguish between two types of housing, the free-equity and the accounting-like. Exemptions are simply homes where rental income is not taxed. In short, tax exemptions occur in the following circumstances:

  • The owner uses at least half of the home for his own use, based on rental value.
  • All or more of the property is rented for less than NOK 20,000 in the income year.

Rental value and maintenance

Rental Value

Not the price you rent for, but the price corresponding to the apartment / apartment is rented out for the market.

Maintenance expenses

Costs incurred to maintain the standard of the home.

In addition, there are also tax exemptions in cases where the landlord owns a semi-detached house and rents out the one dwelling. This despite the fact that the apartment in which he lives, has a lower rental value than the one that is rented out. In addition, the landlord can also rent up to half of the home he lives in.

Taxation

Tax on rental income thus occurs when more than half of the property is rented, calculated according to the so-called rental value. The assumption is that the net rental income exceeds NOK 20 000, and then the entire amount is taxed. Net rental income means the total income less maintenance costs, which concerns necessary costs for maintaining the standard of the housing.

Tax liability also occurs in cases where the entire home is rented for parts of the income year and where the rental income exceeds NOK 20,000. In that case, the entire amount is taxed and no deduction for maintenance costs is deducted. The last thing is important to note.

Multi-family

Examples

Example 1

Per and Lise owns a detached house with an independent apartment rental that they rent. Revenue from this is NOK 72,000 a year. The estimated rental value for the apartment is 68 000 kroner, while the rest of the accommodation is 112 000. Since the rental value for the apartment is less than that for Per and Lise, the entire rental income is tax-free.

Example 2

Arne has got a job abroad and decides to rent out his apartment. He travels in late August and leaves until the end of June the following year. The apartment is rented for 4000 kroner the month. This means that for the four remaining months of the first year he will receive 16,000 kroner in rental income, which will be tax-free as a whole. For the following year, he earns $ 24,000 in rental income. This means that the entire amount is taxed by 28 percent, which means 6720 kroner and 18,280 in net rental income. Had he rented out until May, he had stayed just within the 20,000-krone limit and received the full amount tax-free.

Example 3

Guro and Svein own a generic residence in which there are two large housing units (family apartments) and an independent living space. This means that it is defined as a multi-family home, which in turn means that any rental income is taxable. They rent both the one dwelling unit and the living room. For this, they get a total of 156,000 kroner. They estimate that the maintenance costs associated with these two apartments are 53,000. Net rental income is then NOK 103,000. 20 per cent of tax on this will be 28 840, leaving 127 160 in net rental income.

Example 4

├ůsne and Per own a detached house with a corresponding stabbur. This is furnished with a small living room, while the rest of the stabburet is used as an outhouse for the benefit of the public. a. vedlagring. The rental apartment is rented for 3500 kroner a month, a total of 42 000 kroner a year. The entire rental income becomes tax-free, despite the fact that the stable is considered an independent building. The reason is that the staff cage has a utility function because it is used as p. a. appended.

A final situation where tax liability arises is when you own a so-called multi-family home. According to the Tax Agency’s website, it is defined as a dwelling consisting of three or more family apartments. Income from such rentals is always taxable, even if the landlord lives in more than half of the property (calculated by rental value).

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