Debate, Taxpayers Association | The Taxpayers’ Association warns against increased property tax

If the government chooses to follow the committee that looked at the municipalities’ income, it will cost taxpayers dearly. In that case, the property tax will be increased sharply, regardless of ability to pay.

Next month, the government will present a proposal to the Storting based on a Norwegian public inquiry (NOU 2022:10). This is based on a government-appointed committee that has looked at the municipalities’ income. It is important, because the municipalities have obligations regarding service provision towards us taxpayers. In particular, the municipalities receive income from taxes, in addition to transfers from the state. And most of the country’s municipalities have introduced property tax across the entire municipality. This means that 230 of the country’s 322 municipalities collect property tax for primary residence, secondary residence, holiday home and commercial property – to name a few.

The Taxpayers’ Association believes that property tax is an evil and can easily become a cushion. Surveys carried out by Agenda Kaupang show that there is not necessarily any connection between property tax and the quality of the services the municipalities run. Rather, we see that the municipalities that come out the best in the surveys do not have this tax on housing.

The committee mentioned above has come to the conclusion that the current tax system for property tax should be changed. A change which for home owners will mean a sharp increase in taxation. This means increased costs for taxpayers who own their own home. This will probably also apply to tenants as there is reason to believe that their costs will increase as a consequence.

Today, municipalities are free to decide whether they want property tax. How high the tax rate should be – within given limits, and how big the basic deduction should be. The government has introduced a reduction factor that contributes to a lower property tax base on housing. This in turn means that this home receives lower property tax. In 2020, the maximum tax rate was reduced from 7 to 4 per thousand.

The above-mentioned committee proposes that the municipalities should get even more money from the taxpayers through property tax.

“According to the committee’s assessment, the municipal freedom of action to set the tax rate for housing and holiday homes should be brought back to the same level as in 2019, where all rates followed the general rules in the Property Tax Act of between 2 and 7 per thousand, and without a nationally determined reduction factor on the property value. ” it says in the investigation report.

If the government goes ahead with this, it will hit the wallet hard for taxpayers who already feel that the rope has been stretched far.

Finansavisen has made a calculation which shows that a home with a rate of NOK 4 million will today pay a maximum of NOK 11,200. If the proposal above receives a majority in Parliament, the bill will be increased to a maximum of NOK 28,000. How high the increase may be will be up to the individual municipality.

The Taxpayers’ Association will advise against the government following this proposal. It does not take into account that not everyone who owns a home has the opportunity to pay such a bill. Because even if you own a home, the loan rate can be high and the financial room for maneuver small. Perhaps the person in question is a survivor on a small pension and still lives in the house that has been his home for a long life. There are several factors that come into play here.

When the Taxpayers’ Association asked the parties in the Storting in August last year what they thought about property tax, the Labor Party replied that their aim was to keep municipal taxes down. The Center Party wants to protect the primary home, and makes it clear that there should not be a lack of government transfers leading to the introduction of property tax. SV, on the other hand, wants to remove the maximum limit to let the municipalities decide, and in this way goes further than the proposal from the committee. Rødt, for his part, believes that property tax is not the best way to tax, but that it is up to the municipalities.

The Left is not in principle opposed to the tax, MDG wants a low tax, Frp is opposed to property tax and the Conservative Party wants to keep this tax as low as possible.

As Huseierne points out, there is reason to believe that if the government follows the committee’s proposal – and the Storting adopts it – the municipalities will make use of the opportunity. The Taxpayers’ Association will strongly warn against this. In an expensive time where most of us have to reduce spending, the public sector should also do this. The property tax cannot become a growing cushion for municipalities that do not prioritize the use of money to a sufficient extent.