The Norwegian government has announced the indefinite postponement of a new valuation model for vacation homes. This decision comes after years of development that have cost taxpayers significant sums without reaching implementation.
A Costly Development Process
According to the Ministry of Finance, the function on the model has cost approximately 255 million NOK. A staggering 202 million NOK of those expenses were paid to external IT and consultancy firms.
A detailed breakdown reveals that Kartverket spent 186 million NOK, with 156 million going to external aid. Skatteetaten spent 69 million NOK, including 39 million in external costs, while the Ministry of Finance spent 13 million NOK.
External Reliance and Political Friction
The high reliance on outside facilitate has drawn criticism from Martin Virkesdal Jonsterhaug of the Progress Party (Frp). Jonsterhaug expressed surprise at the total expenditure and the extent of external assistance, suggesting the work could have been handled internally.
The Ministry of Finance noted that external support included companies such as PwC, Bearingpoint Norway, KnowIT, Sopra Steria/Egde, Bouvet, and Dfind. PwC specifically developed a machine learning model designed to identify links between property characteristics and market value.
The Fear of a “Tax Shock”
The postponement follows significant uncertainty among property owners. Many feared a “double tax shock,” particularly those with older vacation homes in high-pressure areas and low levels of debt.
This anxiety was compounded by the introduction of a new primary residence valuation model from 2026, which reportedly missed its mark by over half a billion NOK. Finance Minister Jens Stoltenberg stated that the vacation home model may only be reconsidered as part of a broader, cross-political tax settlement.
Potential Next Steps
While the current project is stalled, the government suggests that the work was not entirely in vain. Senior advisor Cecilie Skjennald stated that efforts to improve register data quality remain valuable to society regardless of the model’s implementation.
Future changes to the valuation model could potentially occur if they are integrated into a comprehensive tax reform. Such a scenario might include adjustments to the wealth tax or increases to the basic deduction.
Frequently Asked Questions
What is the current valuation for vacation homes?
Currently, the wealth value of vacation properties is valued at 30 percent of the market value.
How much was spent on external consultants for this project?
Approximately 202 million NOK of the total costs went toward external assistance from IT and consultancy firms.
Why did the government decide to postpone the new model?
The decision followed pressure and uncertainty regarding potential “tax shocks” for owners, as well as a lack of a broad political majority for the changes.
Do you believe high-cost consultancy projects in government are justified if they improve underlying data quality, even if the primary goal is not met?
