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Thursday, July 18, 2024

Property tax bills spark more outcry

Several cultural institutions and humanitarian organizations are the latest to be hit by new property tax bills from the City of Oslo that they claim can threaten their operations. Taxpayers in other cities and towns around Norway are also receiving shocking bills, many in areas where the local economy is thriving and the local government has had a budget surplus.

The Kon-Tiki Museum in Oslo is among the cultural institutions in Oslo that are now receiving large property tax bills from the City of Oslo’s Labour Party-led government. PHOTO:

Norwegian Broadcasting (NRK) reported Monday morning that local governments around the country have, on average, enjoyed some of their best operating results in a decade. At the same time, the number of municipalities imposing property tax has doubled.

NRK singled out the municipality of Krødsherad in Buskerud County, home to the popular skiing community around Norefjell. Its Labour Party-led local government has reported solid budget surpluses over the last four year and its debt is considered to be well under control. Local politicians nonetheless decided to impose property tax on homeowners and, perhaps most importantly, the owners of the often-high-priced hytter (holiday homes) that have sprung up all around the mountain of Norefjell in recent years. The first property tax bills started arriving in the post last week.

“It’s not our intention to plague folks with property tax,” insisted Mayor Gustav Kalager of the Labour Party. He told NRK on national radio Monday morning, though, that “there are things that need to be done, and then we need to share the costs.”

Others insist the cost-sharing has gone way too far. “I can well understand that folks are beginning to react, when they see the solid financial results that Norwegian municipalities have and when they’re also getting steadily higher property tax bills in the mail,” said Helge André Njåstad of the conservative Progress Party. It is clearly noticing a property tax revolt that’s spreading around the country, as property owners receive much larger bills for this year based on both higher property value assessments and, in some municipalities, higher tax rates.

Local governments’ power to tax
In Norway, it’s the local governments for municipalities (kommuner) that can choose to impose property tax and set its tax rates. In Oslo, the property tax imposed by the new Labour Party-led government last year is backfiring badly and may even be illegal. Not only have tax bills tripled for many homeowners, cultural institutions and humanitarian organizations that are run by non-profit foundations are also receiving huge new bills tied to the property they own.

Newspaper Aftenposten reported over the weekend that Kunstnernes Hus (The Artists’ House) in Oslo, which is located in and charged with maintaining one of Norway’s premier examples of functional architecture from the 1900s, got a bill for NOK 200,000, which more than negates the NOK 150,000 in funding it receives from the city to support its operations. Decrying the logic of that, its leader told Aftenposten that it had sought an exemption but so far has been turned down.

Norway’s literary hero Henrik Ibsen, shown here in his Oslo home that now houses the Ibsen Museum, may spin in his grave over the NOK 202,000 property tax bill the museum has received from the City of Oslo. That’s a significant portion of a small museum’s annual budget. PHOTO: Nasjonal Bibliotek

Other local museums and cultural institutions in Oslo have been receiving surprisingly big bills, too, all based on the value of the property where they’re located: NOK 202,000 for the Ibsen Museum that’s based in the former fashionable home of Norway’s famous literary figure Henrik Ibsen, NOK 43,000 for the Kon-Tiki Museum on Bygdøy, NOK 500,000 for the Teknisk Museum at Kjelsås (which may force the museum to eliminate exhibits) and NOK 600,000 for Sentralen, the new cultural institution in downtown Oslo backed by DNB’s charitable foundation. Only property that’s owned by the state or the city itself is exempted from Oslo’s new property tax law. The other museums and institutions with property owned by foundations can apply for exemptions, but uncertainty is running high over whether they’ll be granted or rejected, as in the case of Kunstnernes Hus.

On Monday, newspaper Dagsavisen reported that several humanitarian organizations run by foundations are also in despair over new, large tax bills that aren’t in their budgets for 2017. Kirkens bymisjon, a Christian aid society, and Blåkors, which helps alcoholics, have been hit with property tax bills from the City of Oslo for more than NOK 1 million. “This will hurt those using and needing the services of these organizations,” Inger Helene Venås, in charge of charitable groups for the employers’ organization Virke, told Dagsavisen.

Venås, along with many others, claims the City of Oslo’s new property tax system has been imposed too quickly over the past year with little regard for the consequences. She suggests city officials and the Labour politicians behind them simply didn’t think through how hard the tax would hit: She claims they should follow the example of party fellows in Trondheim who exempted charitable, humanitarian and non-commercial operations run by foundations like museums, sports organizations, day care centers, hospitals, nursing homes and private schools. “As we see it, this has just gone too fast,” Venås said. “We are therefore trying to make them (Oslo city officials) aware of this.” She noted that several of the organizations hit with the big, unexpected bills have attempted “dialogue” with the city themselves “but are not getting a response. Therefore the unease and uncertainty is rising.”

Oddbjørg Minos, an Oslo City Council member for the Christian Democrats party, also thinks the city’s Labour government acted in haste when imposing the new property tax. “Many important organizations that provide services for children and drug abusers, for example, weren’t granted exemptions,” Minos told Dagsavisen. “Those are areas we absolutely think should be exempted from this tax.”

Property tax revenue soaring
State statistics bureau SSB (Statistics Norway) reports that local governments around Norway saw their tax revenues increase by NOK 14 billion last year. At the same time, their pension costs rose as did debt in some communities. The Progress Party nonetheless thinks property taxes have become too high, especially in municipalities like Krødsherad (Norefjell), Hattfjelldal, Etnedal, Engerdal, Vaksdal, Trøgstad and Våler in Østfold. Almost all are run by either the Labour Party or the Center Party, or both.

NRK reported that they defend their property taxes as necessary to shore up local finances. The Center Party mayor of Hattfjelldal claims its strong bottom line was only due to extraordinary gains including compensation after a finance scandal several years ago. The Labour Party mayor of Etnedal claimed it lost state funding when an asylum center was shut down and that the municipality needs more money to integrate refugees. The Center Party mayor of Engerdal claims the property tax revenues are needed to pay for infranstructure improvements. None of the local governments has any plan to eliminate or reduce property tax, according to NRK.

The Progress Party, meanwhile, is proposing a repeal of the state law that allows local governments to impose property tax, not least since Norwegians’ property values are already included in the annual tax they also must pay on net worth. “We view this as an unworthy form of double taxation that also fails to take into account taxpayers’ income and debt (and ability to pay the tax),” claims the party, which currently shares government power with the Conservatives. That’s likely to be fought by Labour and Center party politicians in Parliament, who want local communities to have more control over their local finances and who are teaming up to seize state government power from the Conservatives and the Progress parties in national elections in September. Berglund



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