Interests in real estate ownership can be classified under Norwegian law as follows:
Last modified 7 Oct 2024
There are no specific restrictions on foreigners investing directly in real estate in Norway. Everyone of whatever nationality, intending to buy Norwegian real estate must apply for a concession from the local authority, but this formal requirement needed to obtain title in the Land Register very rarely constitutes a problem for investors.
There are also broad exemptions from this requirement, including:
Last modified 7 Oct 2024
In some specific cases, mandatory pre-emption rights may apply. If a property is subject to co-ownership or is part of a housing cooperative, then the co-owners or members of the cooperative have a right of pre-emption.
Last modified 7 Oct 2024
The Alienation Act (Avhendingsloven) regulates the transfer of planned and completed properties between individuals and/or between professional parties (companies etc.). Professional parties may opt out of the regulations imposed under the Alienation Act.
New buildings, including contracts for the proposed construction of a building, are not regulated by the Alienation Act.
In the case of individuals such contracts are regulated by Norwegian law number 43 of 13 June 1997 (Bustadoppføringslova), but for professional parties there is freedom of contract.
In the case of professional parties entering into contracts, including those for transfer of title and for the proposed construction of new buildings, land transfer is regulated by the Alienation Act, but the construction elements are regulated through the building contract.
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No. The Alienation Act normally regulates the transfer of title to all types of real estate, although professional parties (companies, etc) may contract out of the Act.
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Once the purchase agreement is concluded the transfer of ownership takes effect at law. The purchaser must subsequently apply for a concession from the local authorities within four weeks from the transfer date. Even though it is not a legal requirement, a deed of transfer is also usually filed with the Land Register (Kartverket) to establish legal protection against claims by third parties and to avoid potential disputes with subsequent buyers.
Last modified 7 Oct 2024
All property transactions, including sales and purchases, mortgages, easements and rights of use, as well as any pending disputes, can be registered.
Any interested party can access the Land Register, which is organized by title and land number for each municipality. Even though it is not a legal requirement, deeds of transfer are usually filed with the Land Register (Kartverket) to establish legal protection against claims by third parties and avoid potential conflicts with subsequent buyers.
Even though it is not a legal requirement, deeds of transfer are usually filed with the Land Register (Kartverket) to establish legal protection against claims by third parties and avoid potential conflicts with subsequent buyers. All property transactions, including sales and purchases, mortgages, easements and rights of use, as well as any pending disputes, can be registered. Any interested party can access the Land Register, which is organized by title and land number for each municipality.
Title insurance is in principle available, but is not common except in events where there are specific risks related to the legal title, typically due to a preceding split and separate transfer of the formal and beneficial ownership to the property respectively.
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A commercial real estate transaction normally involves a due diligence process, the negotiation and drafting of the contract, the signing of the contract and the final transfer of ownership (normally referred to as closing).
Contracts for the sale and purchase of commercial real estate are normally drawn up by one of the parties’ lawyers based on the bid from the buyer and the acceptance letter from the seller.
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Yes. Investors usually carry out technical, environmental and legal due diligence on title, building permits, leases and contracts related to the property. This is normally carried out before purchase, but may also be done during a short specified period after the contract is signed if agreed between the parties in the contract.
If the due diligence is carried out after the contract is signed, the contract will specify how to deal with any negative findings.
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An individual cannot transfer the title, mortgage or lease of their common home without the approval of their spouse or registered partner.
Last modified 7 Oct 2024
A legally binding agreement can be entered into either in writing or verbally. Often an estate agent or a lawyer will draft the contract for the sale and purchase.
The sale and purchase is effective immediately after the signing or verbal acceptance of the agreement, without any further activity being necessary (such as handover or registration in the Land Register).
The specific content of a contract is negotiated on a case to case basis. However, such negotiations are often carried out on the basis of a standard-form contract.
Professional parties (companies etc) often opt to contract out of the Alienation Act, although some elements of the Alienation Act are mandatory if the buyer is an individual.
The essential elements of the contract comprise:
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According to statutory law the seller may disclaim responsibility for the property by selling it as seen, often referred to as 'sold as is'. Even if the contract includes such a clause (which it often does), sellers may still be held responsible if they have given inaccurate information about the property, failed to provide important information of which they are aware, or if the property is in a substantially worse condition than expected.
This responsibility may not be fully disclaimed in a contractual agreement with the buyer.
It is common for Professional parties (companies etc) to negotiate specific warranties.
The buyer must notify the seller within a reasonable timescale if circumstances are discovered which may constitute a breach of contract.
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In the case of a material breach of contract, the buyer is, in some cases, entitled to terminate the contract (with an associated right to a refund of the purchase price and receipt of damages). In other cases, the buyer may ask the seller to repair any defects, or to reduce the purchase price accordingly.
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Buyers should consider the following issues:
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This situation is normally governed by the 'polluter pays' principle, though the seller can disclaim responsibility in the contract. However, if any pollution is discovered, the owner of the building may be held responsible by the authorities regardless of any contract which exists. If, according to the contract, responsibility for the pollution rests with the seller, the buyer may then subsequently claim restitution from the seller.
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The development plan provides a description of the permitted use in different areas of a municipality. Local authorities may make further specifications in the plan. Any interested party can contact the local authority to get access to the development plan.
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It is common for larger contractors to enter into a development agreement with the relevant public authorities to facilitate a development project. Under such an agreement a developer would normally undertake to carry out certain public works, such as building roads, providing public parking spaces and green areas, etc.
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The authorities, or a private developer with the assistance of the authorities, can expropriate property for the purpose of building roads, schools, transport facilities, playing fields etc although this right is subject to restrictions. A property can only be subject to compulsory purchase after an overall evaluation of the advantages and disadvantages has been carried out by a court of appraisal. The buyer must pay the market value for the expropriated property, as agreed by the same court.
Last modified 7 Oct 2024
Where deeds of transfer are filed with the Land Register, registration is normally subject to stamp duty at the rate of 2.5% of the purchase price or the market price if this is higher. There are exemptions from this where property is transferred between married couples, where the transferred property is a unit in a housing cooperative (borettslag), or where companies are merged or demerged. The stamp duty is paid by the buyer.
The seller must pay income tax on any profit from the sale.
Agency fees are usually between 1% and 3% of the purchase price. These are normally paid by the seller unless otherwise agreed. In addition, there is a charge for the registration of the title deeds, as well as any mortgage deeds. These charges are paid by the buyer. In the case of other costs, such as legal fees etc, each party normally pays its own expenses.
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When buying real estate in Norway via a share deal the agency fees are usually between 1% and 3% of the purchase price. These are normally paid by the seller unless otherwise agreed. In addition, there is a charge for registering any mortgage deeds which is paid by the buyer. In the case of other costs, such as legal fees, each party normally pays its own expenses.
No stamp duty applies to share deals.
Specific tax rules apply to the taxation of limited liability companies.
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Are there any legal restrictions on foreign investors acquiring real estate?
There are no specific restrictions on foreigners investing directly in real estate in Norway. Everyone of whatever nationality, intending to buy Norwegian real estate must apply for a concession from the local authority, but this formal requirement needed to obtain title in the Land Register very rarely constitutes a problem for investors.
There are also broad exemptions from this requirement, including:
Last modified 7 Oct 2024