Î
Rent adjustment
•
Rent is usually adjusted yearly in accordance
with 100 % of the change in the Norwegian Consu-
mer Price Index, as published by Statistics Norway (
Statistisk
Sentralbyrå
).
•
The Norwegian Rent Act of 1999 provides legal basis for requi-
ring adjustment of the rent if such adjustment is not regulated
in the lease agreement between the parties.
Î
Expiration of the lease term
•
According to the Norwegian Rent Act of 1999, a lease agree-
ment is either fixed-term or indefinite.
•
A fixed-term lease agreement expires without prior notice
upon the end of the agreed lease term. A fixed-term lease
agreement becomes indefinite if the lease continues past
three months after it has expired.
•
The lessee has the right to terminate an indefinite lease
agreement with three months prior notice, and there are no
requirements as to the form of such notice. The lessor also has
the right to terminate an indefinite lease agreement, however
there are several limitations and requirements as to the form
and procedure of such termination.
Î
Energy certification
•
All dwellings and commercial buildings (over 1,000 sq.m.) that
are sold or leased out are required to have an energy certifi-
cate.
•
It contains an energy label with the energy standard of the
building, consisting of an energy grade (from A (best) to G
(worst)), a heating grade with information about the source
of the energy, the measured current consumption of energy
(required for commercial buildings, voluntary for dwellings),
possible measures for improving the building’s environmental
performance and a summary of the most important informa-
tion on which the certificate is based upon.
•
The Norwegian Water Resources and Energy Directorate may
issue fines in the case of absence of an energy certificate. We
are not aware of any substantial fines having been issued,
however it is likely that such absence will have commercial
implications.
TaX
Î
Direct acquisition of a property
•
As a main rule the registration of title in connection with an ac-
quisition of a real property is subject to the payment of stamp
duty (
dokumentavgif
t), however the sale of real property is
exempt from value added tax (VAT).
•
Registration of title is subject to payment of 2.5 per cent stamp
duty, the basis for calculation being the fair market price of the
property at the time of registration. Registration is not, howe-
ver, a legal requirement.
•
Foreign investors should note that a real property is vulnerable
to the creditors of the registered title holder if the transfer of
title is not registered at the same time as the acquisition of the
property.
•
Provided that the title deed is already registered on the target
company (normally a single purpose vehicle), a transfer of
shares does not trigger stamp duty. Other costs may also ac-
crue in connection with the transaction, such as fees to public
Investor Guide to Europe 2014
| 71
authorities.
•
If either of the par-
ties are represented by a
real estate agent (normally the
seller is), the payment of the agent’s
fees is subject to agreement between the
parties. Normally, the party who has engaged
the agent will carry this cost.
Î
asset deal vs. share deal
•
Sale and purchase of commercial real estate in Norway has
since 2004 normally been organised as a transfer of the
shares in a single purpose vehicle owning and holding title to
the property, rather than a sale of the property itself.
•
The reason is that such indirect sale is normally tax benefi-
cial for the seller (very low capital gains tax), and to a certain
extent also for the buyer, as stamp duty is not payable upon
transfer of shares. The buyer is normally compensated for
a lower depreciation basis due to any difference between
the actual market value and the tax value of the property
(depending on the classification of the property, as well as
the distribution between property construction and technical
installations, the compensation normally varies from 7 % to 14
% of the difference).
