– It is completely out of the question to increase our housing taxation for ordinary people, emphasizes Finance Minister Trygve Slagsvold Vedum (Sp) to news. He refers to the controversial “housing tax”, which was proposed by the Tax Committee at the end of last year. The committee then proposed a number of major changes to create a new comprehensive tax system. In a recent consultation response, the Norwegian Business Association (NHO) gave support to the Tax Committee’s proposal to introduce a tax on the benefit of living in one’s own home. This has once again ignited the debate. Now, however, the finance minister guarantees that no housing tax will be introduced. – Now both the Tax Committee, which was appointed by the previous government, and now also NHO have come out and supported that we should increase housing taxation for people. The government is strongly against that, states Vedum. Finance Minister Trygve Slagsvold Vedum (Sp) dismisses the proposal for a new housing tax. Pictured here in front of his own home in Christmas 2021. Photo: Knut Røsrud / news Want people to own their home But the proposal for a housing tax does not only attract criticism. In separate consultation responses, both Norges Bank and Finanstilsynet supported the proposal. They pointed out that the tax changes could help reduce debt and house prices, thereby making the financial system less vulnerable. Despite the input, it is out of the question for the government to gradually introduce a new housing tax. – Because we want people to own their home. And we also don’t want to cause unrest around the taxation of housing. It is an advantage that we are a country where people are stimulated and encouraged to own their own home. It creates more stability for the individual family, says Vedum. – Both the OECD and the IMF have said that a lack of housing tax can be dangerous for the Norwegian economy. What have they not realized, then? – It is a political assessment! A society is not just a theoretical model. We believe it is important that as many people as possible own their home, and that there should be security around it. The Tax Committee’s proposal for a new housing tax: The committee recommends that a tax be introduced on the benefit of using one’s own home which is phased in over some time, so that time is given for adaptation. In the first instance, the committee proposes that 1 per cent of the housing value be entered as income and taxed at 22 per cent. In addition, the committee proposes a system for taxation of gains on one’s own home with fewer opportunities for circumvention than the current rules, where gains from the sale of real primary homes are still shielded. The committee also proposes that the tax exemption for holiday homes be abolished. The committee also proposes to remove the tax exemption for rental income from primary residences. The committee believes that such a change creates room for removing or reducing the document fee. In isolation, the proposals are estimated to increase tax revenue by around NOK 17.3 billion Source: Ministry of Finance Puts the proposals in the drawer The aim of the Tax Committee’s proposal was to create a comprehensive tax system that was overall better for the economy. The committee’s chairman, Ragnar Torvik, believes it is a “bad” decision by the government to shelve the property tax proposal. He is an economics professor at NTNU. – Housing tax is unpopular. But we have to see the connection between housing tax and other taxes, he points out. We need a housing tax so that we can reduce other taxes, which are more harmful to Norwegian value creation, Torvik believes. Economics professor and head of the Tax Committee Ragnar Torvik will introduce housing tax in order to reduce other taxes. Photo: Alf Simensen / N The professor would rather reduce tax in two other areas: Tax on work: A major challenge going forward is that we need many more people in the labor market. Then we have to make it more profitable to work, and reduce the tax on work, says Torvik Skatt på kapital: By reducing taxes for the business sector somewhat, we make it more favorable to invest in business activities. It will help to increase value creation in the Norwegian economy, Torvik believes. – So this is not an increase in taxes, but a realignment, says the committee leader. But none of the proposed changes to the housing tax will come to fruition, emphasizes the finance minister. – The tax regulations that apply to housing, that is fixed. We do not want to follow up on what the committee suggested. Finance Minister Trygve Slagsvold Vedum (Sp) was happy when he received the report from the Tax Committee chairman Ragnar Torvik in December. Now he is putting the proposals related to housing tax in the drawer. Photo: Alf Simensen / NTB
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