Norway: Real Estate

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This country-specific Q&A provides an overview to real estate laws and regulations that may occur in Norway.

It will cover the most pertinent issues including ownership structures, restrictions, transfers, taxes and environmental contamination.

This Q&A is part of the global guide to Real Estate. For a full list of jurisdictional Q&As visit

  1. Overview

    Standard contracts are widely used and accepted as basis for negotiating commercial and legal terms, to a larger extent than what is common internationally. The contracts will more or less reflect market standard regulations, and are updated approximately every second year, due to changes in the legal framework and for incorporation of new market signals. There are standard contracts for both direct acquisition of real estate (asset deals), and for share purchase agreement for share deals of real estate companies. Separate standard contracts for the Norwegian private limited liability company and other company structures that are common in Norway have been developed. Various contract standards for lease agreements have also been prepared, such as for lease of new/used premises, lease of new/used buildings and triple-net lease contracts. For more complex development projects, there is an extended version of the lease contract containing a process for variety orders that is linked to the construction contract.

    Compared to international standards for share purchase agreements and lease agreements, Norwegian standard contracts may be considered as quite short and with provisions that seem to open up for discretionary judgement. The background law will supplement the contracts and must be taken into account in order to identify the parties` legal positions. Furthermore, the market practice may be considered more based on an assumption of fair treatment and loyal co-operation than what is common in many other countries. Foreign investors therefore often point out the lack of specification and foreseeability in the wording of the contracts. However, there is a recent development of the Norwegian contracts, where the contracts at least to a certain extent are adopting typical regulations from international lease and M&A agreements.

  2. How is ownership of real estate proved?

    Ownership is, in principal, possible to prove by all relevant evidence under Norwegian law, and no written contract is necessary. However, ownership is most commonly proved by ordinary contracts between the seller and buyer.

    There is an important distinction between ownership to a real estate, and being registered as the title holder of a real estate. The registration of ownership in the land register will only secure the owner against defeat of creditors and the risk of an other bona fide buyer that is not aware of a transfer that has not been registered.

    The land register is the official register of legal rights and obligations associated with property, and is maintained by the Norwegian Mapping Authority (Kartverket), a public agency under the Norwegian Ministry of Local Government and Modernisation. The land register lists ownership, easements and encumbrances such as mortgages, leasing rights, pre-emptive purchasing rights, etc. Details of physical aspects relating to a property, such as borders, areas, buildings and addresses, are registered in the cadastre property register, which is maintained by the individual municipalities.

  3. Are there any restrictions on who can own real estate?

    In general, there are no legal requirements that must be fulfilled in order to own, lease or in other ways invest in real estate in Norway. For share deals regarding real estate, no concession is necessary. However, direct acquisition of real estate is, as a main rule, subject to concession pursuant to the Norwegian General Concession Act of 2003. The concession requirements are the same for both Norwegian individuals/companies and foreign individuals/companies.

    There are several exceptions from the Norwegian General Concession Act which cover a broad spectre of real estate acquisitions, and concession is therefore rarely a risk in a real estate transaction. In respect to undeveloped large properties, agricultural areas, minerals, industrial properties or rights to waterfalls etc., stricter requirements apply and will constitute a risk factor in any transaction.

  4. What types of proprietary interests in real estate can be created?

    Freehold interest (owning land and building) and ordinary fixed term lease are the most common legal interests in real estate in Norway. Leasehold (long term right of disposal) is not common in Norway.

    A combination of leasing land and owning building (ground lease/no: festeforhold) is an alternative form of ownership, more typically used for residential purposes. This legal construction constitutes a significant risk in real estate transactions when the agreement with the land owner entitles the land owner to regulate the ground rent in accordance with the site value (see also Q5).

  5. Is ownership of real estate and the buildings on it separate?

    Ownership of buildings normally follows ownership of land. However, if the access to land is established through a ground lease, Norwegian law allows separate ownership to the buildings under the Ground Lease Act.

    This legal construction is politically controversial, and the Ground Lease Act has been tried before the Supreme Court and the European Court of Human Rights several times over the last 10 years. For commercial property it is important to be aware of clauses regarding regulation of land rent, valuation clauses for assessment of buildings when the land lease expires, and the right to extend the ground lease period.

  6. What are common ownership structures for ownership of commercial real estate?

    In the commercial real estate market it is common for entities to be used for acquiring real estate. The main reason is the tax advantage, and the limited company (no: aksjeselskap) is often preferred. Due to different tax regimes over the last 20-30 years, it is also common to find a structure where a limited company owns a general partnership (no: ANS) or a limited partnership (no: KS).

    In order to avoid paying the 2,5% stamp duty for registration of transfer, there is a significant number of companies – most common a limited company – that owns no other assets than the title to ownership, while the actual ownership is held by another company. The combination of transfer of the property and transfer of the title holding company can be executed without registration in the land register, and the 2,5 % transaction cost is saved. Dependent on how this title holding structure has been established, there may be a risk of defeat of creditors if a former owner of the property falls bankrupt.

  7. What is the usual legal due diligence process that is undertaken when acquiring commercial real estate?

    This is a short summary of the legal due diligence process for real estate transactions:

    • It is most common for the law firm representing the buyer to send a request list to the law firm representing the seller. Some request lists contain both requests for documents and questions to the seller, sometimes even asking for assessments and evaluations. This is not always accepted by sellers that prefer to limit their scope of responsibility.
    • Generally, the seller will offer a professional and digital data room solution, containing both documents and a Q&A section that is continuously updated. The status of the data room at the opening date varies a lot, and it is still a common experience in the Norwegian market that the seller underestimates the scope of work that is necessary in a professional due diligence process.
    • There is no market standard form of reporting, but we experience several similarities between the reports from different law firms. In general, reports contain an executive summary with major findings and a more detailed part of the report with findings and recommendations, when applicable.
    • All legal due diligence investigation is made by the counsel, no notary or other public authority is directly involved, apart from providing information requested by the seller or buyer.
    • One of the reasons for the widespread use of the standard contracts in the Norwegian market is that it simplifies the transaction process, including due diligence investigations, when the structure and content of both the acquisition contracts and the lease contracts are well known from before. This includes a set of warranties covering ownership, legal title and other fundamental elements of a real estate company.
    • The investigations typically cover corporate law matters, tax and VAT to encumbrances, contracts for acquiring the property, lease agreements, zoning plans and other public law issues and disputes. In larger real estate company structures, these investigations can be comprehensive and thus also constitute a material cost to the transaction. We find it common that the investigations are simplified, i.a. when buying a company owning shopping centres only a representative part of lease contracts are examined.
    • Furthermore, in recent years we have seen that transaction insurance has been used as a strategic tool to simplify the due diligence process, i.a. in transactions that cover a broad spectre of companies and properties.
  8. What legal issues (if any) cannot be covered by usual legal due diligence?

    There are several issues that may be difficult to reveal, in a usual legal due diligence, typically where legal and financial/technical due diligence overlap. Some examples are mentioned here:

    • Large infrastructure projects may from time to time lead to expropriation of commercial real estate, and neighbouring projects may interfere with essential plans for development of the property. Sometimes early stage planned projects are available in public registers, but this is not always the case.
    • When commercial real estate is repaired /renovated, an the project is so comprehensive that it – under the discretionary judgement of the local building authority – is a general renovation, both the existing and the new elements are to be upgraded to current technical standards. It is possible to make an argument for disproportionate requirements and/or a dispensation from certain requirements, but it is a risk that the application is declined. Unless the landlord has made sure that the market standard lease agreement is adjusted to ensure that the increased building cost is covered under the rent to be paid, the lessor company must bear the loss.
    • Change of use – within the frame of lawful use under the zoning plan – will as a main rule be granted with no further risk or cost. However, the part of the premises that is used differently from before, shall as a main rule be upgraded to current technical standards. This may be very difficult to reveal. Change of use that is not in accordance with the zoning plan can be difficult to reveal, and the political risk for obtaining a dispensation or obtaining a new zoning plan can be material for the transaction.
    • Tax issues regarding allocation of assets in correct asset group for depreciation purposes may be very difficult to reveal.
  9. What is the usual process for transfer of commercial real estate?

    Transfer of real estate will normally include the following elements:

    • There are no general requirements for documentation of the agreement or signing of a contract. A legally binding agreement is established when the parties have agreed on all material terms for the transaction.
    • Heads of terms or a letter of intent are not considered legally binding, the legally relevant question is whether all material terms are negotiated and agreed. Thus, a document with the heading "LOI" or similar may be considered a legally binding contract if all material terms are agreed and included in the document.
    • Thus, in order to ensure foreseeability, it is common to include an explicit reservation that no agreement can be entered into unless signed by authorised persons and/or the agreement is subject to board approval.
    • The market standard terms and conditions dominate the transfer process, but no prescribed form is necessary for transfer of the ownership. In asset deals, where the title is registered in the land register, a prescribed deed must be used for the registration.
    • However, no notary or other official authority is necessary to ratify the transfer of ownership (as the registration in the land register only is relevant in asset deals and in order to protect against third party interests).

    Transaction Steps





    · Real estate agent engagement

    · Vendor due diligence, or a more limited preparation

    · Bidding process, including document of acceptance

    · Negotiation of sale and purchase agreement with buyer

    · Preparation of a bidding document

    · Due diligence

    · Legal, financial and technical examination of target company and its assets

    · Arrangement of purchase price funding (including any third party debt)

    · No prescribed form of agreement but industry standard terms

    Signing to Closing

    · Satisfaction of any conditions to closing

    · Satisfaction of any conditions to closing


    · Execution of transfer agreement

    · Refinancing of any existing debt and discharge of mortgage (if any)

    · Execution of transfer agreement

    · Payment of purchase price

    · No prescribed form of agreement but industry standard terms


    · Shareholder`s meeting with election of new board members

    · Payment of stamp duty land tax (asset deal)

    · Registration of transfer at land registry (asset deal)

    · Maximum Land Registry registration fee 2,5 % of purchase price + NOK 525

  10. Is it common for commercial real estate transfers to be effected by way of share transfer as well as asset transfer?

    Most commercial real estate is owned through single purpose vehicles, and commercial real estate is normally transferred as a share deal in order to avoid tax and stamp duty. These companies are most common organised as private limited companies, where capital gains on the sale of shares is being tax exempt for corporate shareholders (individual shareholders will be taxable on any gains from the transaction). For asset deals, taxable gains are taxed at 24% (23 % from 2018). In addition, a stamp duty of 2,5% of the market value of the property will be incurred in an asset deal when the purchase is registered in the land register, while there is no stamp duty on the sale of shares. Capital gains and stamp duty are also avoided in transactions where the target company is a partnership; either a general partnership (no: ANS), or limited partnership (no: KS).

  11. On the sale of interests in land does the benefit of any occupational leases and income automatically transfer?

    In asset deals, as a dominant main rule all benefits are transferred to the new owner. However, encumbrances may be exclusively connected to a person rather than the property. Thus, the new owner may not be entitled to benefits after transfer of the property.

  12. What common rights, interests and burdens can be created or attach over real estate and how are these protected?

    In addition to encumbrances, it is possible to establish a variety of rights, interests or burdens over real estate. Such easements can be registered in the Norwegian land register in order for the holder of the right to obtain protection against third party interests. According to the Norwegian Land Registration Act, it is only possible to register a document to create, modify, assign, pledge, acknowledge or terminate a right subject to a real estate. A claim towards a person or a company may not be registered on a property owned by the person or the company, since the claim in such case will not be subject to the property itself.

    Common easements are right of way, parking rights, right to place and maintenance sewer pipes, restrictions on construction heights, size or type, right to use natural resources, right of first refusal and restrictions on certain types of use. It is also possible to register judgments regarding the property.

  13. Are split of legal and beneficial ownership of real estate (ie Trust structures) recognised?

    Split of legal and beneficial ownership of real estate (i.e. trust structures) is not recognised under Norwegian law.

    However, it is possible to establish a lending syndicate where a security agent (bond trustee) takes care of third-party financial entitlements on a contractual basis. This contractual obligation is enforceable under Norwegian law (see Q21).

  14. What are the main taxes associated with commercial real estate ownership and transfer of commercial real estate?

    Upon direct sale of real estate, the seller will be taxable for any gain on the real estate. Any gain will be taxable with 24%, while any loss will be deductible in the 24% tax base. The taxation gains may be deferred and taken as income with 20% per year on a declining balance method, while a loss must be deferred and may only be deducted with up to 20% per year on a declining balance method.

    If the transaction is structured as a share deal, an individual shareholder will be taxable with 29.76% on any gains arising from the sale of shares. Any loss will be deductible in the 29.76% tax base. However, if the shares are held by a corporate shareholder, Norwegian tax law has a preferential participation exemption method. Corporate shareholders will not be taxable for gains on sale of shares of Norwegian resident companies (nor EEA-companies or other qualifying companies).

    In an asset deal structure, it is customary to register the purchaser as the new owner of the real estate in the Norwegian Land Registry. The registration itself triggers a small fee of NOK 525. In addition, there is a stamp duty of 2.5 % of the real estate’s sales value. As a main rule, the Norwegian Land Registry calculates the stamp duty from the purchase price, but if the purchase price differs from market value, the market value will form the basis for calculating the duty. It is notable that it is the marked value at the actual time of the registration, and not the purchase, that forms the basis for the calculation. There is no stamp duty for share deals.

    The local municipal authorities are entitled to levy property tax on commercial (and residential) property. The rates vary from 0,2 to 0,7 % of the taxable value of the property (which is normally lower than the market value).

    For 2018, the tax rate on ordinary income for corporations and individuals will be reduced from 24 to 23 %.

  15. What are common terms of commercial leases and are there regulatory controls on the terms of leases?

    Most of the commercial lease agreements in Norway are entered into on the basis of standard agreements. Although there are several standard agreements, they all have in common that they widely deviate from the background law in favour of the landlord. The reason for this is that the purpose of the Norwegian Tenancy Act primarily is to ensure the rights of private consumers who are renting their accommodation, giving a regulation which is not adequate for commercial leases. For commercial leases, there is contractual freedom and the parties may legally agree to deviate from most of the provisions in the Norwegian Tenancy Act. However, in order to actually deviate from the Norwegian Tenancy Act, this needs to be agreed between the parties. If nothing else is agreed, the Norwegian Tenancy Act will complement the lease agreement on provisions not included in the lease agreement.

    The rent is usually specified as a yearly, fixed rent. For retail leases turnover rent is widely used, often in combination with a fixed minimum rent. The fixed rent, or fixed minimum rent, will normally be subject to a yearly adjustment in accordance with any changes in the retail price index published by Statistics Norway. The tenant is normally not entitled to withhold rent to secure any claim that the tenant has or may get against the landlord as a result of any defect or delay. The parties may not deviate from section 4-1 in the Norwegian Tenancy Act, which states that the rent may not be unreasonable compared to the level of rent which is normally obtained when concluding an agreement concerning similar properties on similar terms. This provision does not lead to many conflicts, as professional parties will normally reach into an agreement on, or close to, market terms.

    The tenant is normally not entitled to sublease the leased property without a prior written consent of the landlord. Such consent may not be withheld without just cause. Further, the tenant is not entitled to transfer the lease agreement without consent of the landlord, and consent may be withheld at the unfettered discretion of the landlord. Transfer of no less than 50 % of the shares or partnership interests in the tenant will normally be considered as a transfer of the lease agreement, meaning that such transfers needs to be approved by the landlord prior to the transaction.

    Commercial leases are usually entered into for a fixed term, with no right of either party to terminate the agreement during the lease, except in case of material breach of contract. Unless otherwise is agreed, the tenant has no right of renewal of the lease. It is normal to agree on a fixed term, with an option for the tenant to extend the lease for one or more periods. Usually the terms and conditions of the lease agreement is agreed to apply for the extended period, either with a continuous regulation of the rent based on the changes in the retail price index, or with the rent being adjusted to market rent.

    On a regular basis the tenants pay their proportionate share of the common costs related to the property, such as electricity for heating and illumination etc., municipal charges, cleaning and waste disposal, inspection, servicing and maintenance of technical installations such as lifts, cooling plant, ventilation plant etc., security and reception services etc. The landlord does normally cover the costs related to insurance, external building maintenance and replacement of technical installations. Property tax, has traditionally been covered by the landlord. Over the last years, property tax has been introduced in several municipalities in Norway. As a consequence of this, more and more landlords do now collect the costs from the property tax from the tenant, as part of the common costs. In triple net agreements, or for lease agreements with only one tenant on a property, the tenant will usually cover a larger part of the costs related to the property, both the running costs and costs related to maintenance, repairing and renewal.

  16. How are use, planning and zoning restrictions on real estate regulated?

    There are multiple layers of national, regional and local zoning plans that in total constitute restrictions for use of the property. For practical purposes, plans adopted by the municipality are most relevant for commercial property. The municipality can prepare zoning plans for several properties or larger areas, while everyone has a right to prepare proposals for detailed zoning plans.

    Property owners have to make sure that their building applications are granted, and the building projects are started, within five years after a (private) detailed zoning plan has been adopted. On application, the municipality may grant a two-year extension of this deadline. If a building application is submitted in accordance with provisions of the detailed zoning plan, it shall be granted.

    Property owners can apply for dispensation from plans and provisions, however a newly adopted zoning plan should not be easily set aside through series of dispensations. Thus, such dispensation will not be permitted if the considerations behind the provision is significantly disregarded. Furthermore, the advantages of a dispensation must clearly outweigh the disadvantages.

  17. Who can be liable for environmental contamination on real estate?

    The Norwegian Pollution Control Act states that it is prohibited to possess, do or initiate anything that may entail a risk of pollution, unless such pollution is made lawful pursuant to special provisions or otherwise permitted by public authorities.

    The "polluter pays" principle is basis for this legislation. However, Norwegian Supreme Court judgements have made it clear that the owner of a property "owns" environmental contamination on the property if no tenant may be held responsible. Warranties regarding environmental contamination on the property will not stop the public authorities from forwarding a claim against the owner of the property.

    The Supreme Court has also made clear that a parent company may be held liable for pollution caused by its subsidiary.

  18. Is expropriation of real estate possible?

    According to the Norwegian Expropriation Act, real estate, including buildings and other instalments on a real estate, may be subject to expropriation. Further, other interests, rights and burdens, e.g. easements or limitations on construction rights, may be subject to expropriation. The Expropriation Act with associated regulations defines who may be granted right of expropriation, and to which purposes.

    In general, there are strict restrictions for both purposes and reasons for expropriation. An application for expropriation may also be granted on the basis of a zoning plan, where both reasoning and purposes are assumed to be examined when adopting the zoning plan. The Norwegian Constitution and the Expropriation Act guarantees full compensation for the loss. The compensation to the affected property owners shall be decided through expropriation appraisement (judicial assessment).

  19. Is it possible to create mortgages over real estate and how are these protected and enforced?

    It is possible to create mortgages over real estate that is registered in the land register. The mortgages can be created both over the real estate itself, and over easements on real estate, e.g. on lease agreements or rights to use natural resources. A voluntary mortgage is established as an agreement between the lender and the owner of the real estate.

    In order to obtain legal protection, the mortgage must be perfected by registration in the Norwegian Property Register. Once registered, the mortgage will have priority to any mortgages registered later.

    A mortgage will be upheld in bankruptcy proceedings if it is registered no later than the day before the opening of the bankruptcy proceedings. Exceptions from this applies for mortgage created by distraint, and mortgage established as security for older debt.

    Enforcement of mortgages are subject to the Norwegian Enforcement Act of 1992 (Enforcement Act) and must be made through the Norwegian enforcement authorities. It will be conducted by a sale through an assistant appointed by the court (typically through a brokerage firm) or by an auction, depending upon what is considered to generate the highest outcome of the enforcement.

  20. Are there material costs associated with the creation of mortgages over real estate?

    The current property registration fee for real estate, hereunder for mortgages is NOK 525. For refinancing (within the same lending framework and for the same pledgor and real estate) the costs are NOK 200.

  21. Is it possible to create a trust structure for mortgage security over real estate?

    It is possible to create a structure to hold security through a trustee or security agent, and it is commonly used for syndicated and bond deals (see Q 13). Norwegian courts recognise that the security can be held by a trustee or an agent on behalf of the lending syndicate or for the bond holders. It should be noted however that Norwegian law has not incorporated the English law concept of trust and under Norwegian law assets held by a security agent or trustee on behalf of others will be part of a general bankruptcy estate unless such assets can be identified and are held separate from the security trustee's other assets.

  22. What is the main legislation relating to commercial real estate ownership?

    Unless the parties specifically have derogated from applicable law, the background law will supplement real estate acquisition contracts and lease agreements. Direct acquisition of real estate (asset deal) is regulated by the Norwegian Alienation Act of 1992, while acquisition of shares in real estate companies (share deal where the main asset is a property) is initially regulated by the Norwegian Sale of Goods Act of 1988. However, a number of judgements from Norwegian courts show that the Norwegian Alienation Act may apply to such share deals for elements related to the property. Lease agreements are regulated by the Norwegian Tenancy Act of 1999, which supplements the terms of commercial lease contracts. Between professional parties, derogation from several provisions of these acts in favour of the landlord/seller is considered to be a standard practice within the market. Several other acts may apply to real estate transactions and the conclusion of lease agreements, such as the Norwegian Housing Cooperative Act of 2003, the Norwegian Housing Construction Act of 2008, the Norwegian Estate Agency Act of 2007, the Norwegian Property Unit Ownership Act of 1997/2017 (from 2018), the Norwegian Mortgage Act of 1980, the Norwegian Easement Act of 1968, the Norwegian Land Registration Act of 1935 and the Norwegian Ground Lease Act of 1996. The different acts, as well as zoning plans, form a significant public law restriction in the right of disposal of Norwegian commercial property