Overview

Norway offers stunning landscapes, vibrant cities, and charming towns, making it a popular destination for travelers seeking adventure and unique experiences. Short-term rentals can be a fantastic option for accommodation, providing a comfortable and potentially more affordable alternative to hotels. Short-term rentals, often referred to as holiday rentals or tourist accommodations, are popular in Norway, catering to the growing demand from travelers seeking unique lodging experiences. These rentals encompass various types of properties, including apartments, cottages, and even traditional cabins known as "Hytte." However, there are laws in place that property owners and investors should be aware of about short-term rentals to run a successful business. Read on to access this information available in an easy-to-understand style.

Property
Overview

Currently, there's no national association specifically for short-term rental owners in Norway. However, some resources can provide valuable information for property owners.

The Norwegian Hospitality Association (NHF) represents the interests of various businesses within the hospitality sector, including some short-term rental operators. The NHF might offer relevant information or resources for short-term rental owners.

Additionally, local landlord associations might have resources or guidance specific to short-term rentals within their area. These associations can be a good starting point for property owners seeking information about local regulations or best practices.

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short term rentals
What are short Term Rentals in the Country?

In Norway, short-term rentals, also known as holiday rentals or tourist accommodation, refer to the leasing of a property outside a rural area for less than two months to the same tenant. These rentals are typically found in urban or suburban areas and are not part of a larger complex with three or more units. They can be entire apartments, houses, cabins, or even rooms within a property. In the case of a full property rental, the maximum number of occupants is 15. If the owner resides in the property as their primary residence, they can rent out rooms to a maximum of 6 guests. The rental agreement is based on income generation for the property owner. This distinguishes it from house-sitting or hosting relatives for short periods.

What is the maximum length of stay?

The maximum length of stay for a single guest in Norway is less than 30 days. Norway has a recently introduced law that limits the total number of stays per year to 90 days. This applies to individual apartment owners. However, homeowner associations have the authority to adjust this limit within a range of 60 to 120 days per year. This allows for some local variation based on specific community needs. Short-term rentals within residential co-operatives in most cases are permitted for a maximum of 30 days per year.

Are there National Rules or Regulations Governing Short-Term Rentals in the Country?

Norway has national regulations governing short-term rentals. These regulations aim to establish a balance between promoting tourism and ensuring an adequate supply of long-term housing for residents. The key national rule pertains to the maximum length of stay, as discussed earlier. This limit of 90 days, with the possibility of adjustments by homeowner associations, provides a framework for short-term rentals across the country, the other national rule involves taxation, you can read more about the national taxation of short-term rental income in the next paragraph. Beyond these two regulations, additional rules or registration requirements are implemented by local municipalities. These local regulations could address aspects like building codes, zoning restrictions, insurance requirements, health and safety standards, and noise restrictions. Both renters and property owners need to check with the local municipality where the rental property is situated or sign up for the Lodge Compliance Premium package to access the regulations that affect their property.

Is there any National Tax that affects short-term rental?

The income generated from short-term rentals in Norway is considered taxable income for the property owner. The specific tax rate depends on the owner's overall income tax bracket. However, owners are responsible for reporting their rental income and paying taxes based on their marginal tax rate. The tax that affects short-term rental is summarized below;

SHORT-TERM LETTING OF YOUR HOME

In Norway, renting out your entire home for short periods (less than 30 days) comes with a specific tax treatment. Here's a breakdown of what you need to know:

Tax-Free Threshold: You can earn up to NOK 10,000 per year from these short-term rentals without paying any taxes. This is a total for the entire income year, not for each rental. So, if you rent out your home occasionally throughout the year and your total income stays below NOK 10,000, you're tax-free on that income.

Taxing Excess Income: However, if your income from short-term rentals surpasses NOK 10,000 in a year, only a portion of the excess gets taxed. Only 85% of the amount exceeding the NOK 10,000 threshold is considered taxable income. For example, if you earn NOK 15,000 from rentals in a year, you'd first subtract the tax-free amount (NOK 10,000) to get NOK 5,000. Out of this NOK 5,000, only 85% (around NOK 4,250) would be subject to taxation.

Tax Rate: The tax rate applied to this short-term rental income is 22%. This means you'll pay taxes on the calculated taxable amount (85% of the excess over NOK 10,000) at a rate of 22%.

No Deductions Allowed: An important point to remember is that you cannot deduct any expenses you incur while renting out your home, even if a portion of your income is taxed. This means you can't claim costs associated with cleaning, utilities, or wear and tear on your property when calculating your taxable income.

Becoming a Business: If you engage in very frequent short-term rentals of your entire home, the Norwegian tax authorities might consider your activity a full-fledged business. This could lead to a significantly higher tax rate of up to 50.6%. Exactly how often you rent out your home determines if you cross this line from casual rentals to business activity, but frequent rentals are generally the key factor. It's important to keep track of your rental frequency and income throughout the year to ensure you're complying with tax regulations.

SHORT-TERM LETTING OF OTHER DWELLINGS/HOLIDAY PROPERTIES

Rental income from the letting of dwellings or holiday homes that you don't live in/use for holidays or leisure will generally be tax-liable from the first krone. Typical examples of such properties are rental homes or cabins for rent.

Tax on All Income: Unlike renting out your entire primary residence, there's no tax-free threshold for income generated from short-term rentals of these properties. All income you earn from such rentals is considered taxable from the very first krone.

Tax Rate and Deductions: The tax rate for this income is the same as for your primary residence - 22% as capital income. However, there's a key difference: you are allowed to deduct any related expenses from your rental income before calculating the tax you owe. This means you can subtract expenses like cleaning fees, maintenance costs, utilities, and property taxes from your rental income to arrive at your taxable amount.

Potential Business Activity Status: There's a possibility that frequent rentals of these properties could be considered a business activity by the tax authorities. This could lead to a much higher tax rate of up to 50.6%. The decision hinges on an overall assessment that considers factors like the number of properties you rent out, the frequency of rentals, and the duration of each rental stay. Generally, if you own multiple rental properties or engage in very frequent rentals of a single property, you're more likely to be categorized as a business.

permits, license
Are there any Permits, Licenses, or Registrations for Short-term Rentals in the Country?

There's no national permit or license required for short-term rentals in Norway. However, registration with the local Brønnøysund Register Centre might be necessary. This registration process helps authorities track rental properties and ensure compliance with regulations.

As mentioned earlier, some municipalities might have additional registration requirements. These could involve registering the property as a short-term rental with the local authority.

For both renters and property owners, verifying any local registration requirements with the relevant municipality is crucial. This ensures adherence to all regulations and avoids any potential issues.

Is there any National Association for STR owners in the Country?

Currently, there's no national association specifically for short-term rental owners in Norway. However, some resources can provide valuable information for property owners.

The Norwegian Hospitality Association (NHF) represents the interests of various businesses within the hospitality sector, including some short-term rental operators. The NHF might offer relevant information or resources for short-term rental owners.

Additionally, local landlord associations might have resources or guidance specific to short-term rentals within their area. These associations can be a good starting point for property owners seeking information about local regulations or best practices.

National Association for STR Owners

Disclaimer

Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.

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