Norwegian Cabin Association warns of new tax risks for family homes

The Norwegian Cabin Association (Norges Hytteforbund) has warned that a proposal from the Tax Commission could make it difficult for families to retain leisure homes across generations. The proposal suggests making gains from the sale of holiday homes taxable at a rate of 22 percent, whereas currently, sales are tax-free if the owner has owned and used the property for at least five years.

Association chairman Trond G. Hagen stated that the primary concern is not sales to third parties, but internal family transactions. When a cabin is inherited, the person taking over often must buy out other heirs. Without specific exemptions for inheritance settlements and the buyout of co-heirs, the cost of keeping a property within a family could increase significantly.

The association has submitted feedback to the Ministry of Finance, requesting that the proposed transitional rules be expanded. Current transitional protections only apply to owners who have held and used the cabin for at least five of the last eight years, which excludes newly purchased or recently inherited properties awaiting settlement. Approximately 600,000 people in Norway own a leisure home, and nearly half the population uses one through family connections.