Nordic Credit Rating (NCR) said in a report published today that any increase in Norwegian property tax would probably reduce the supply of new housing and raise housing costs, especially for newcomers to the homeownership market.
NCR said it was also concerned by the likely effect of higher property tax on economic growth, credit risk for banks and the impact on credit ratings and funding costs.
Economists have long called for an increase in property tax.
"We agree that property tax is an efficient way of creating tax revenues, but do not concur that an increase would necessarily benefit first-time buyers, as has been suggested," said NCR credit analyst Geir Kristiansen.
"We doubt that the long-term benefits of higher property taxes would outweigh the short- and medium-term costs. At the very least we would expect a broader analysis of the costs and benefits than we have seen so far," he added.
If you have any questions, please contact:
Geir Kristiansen, analyst, +47 90 78 45 43 geir.kristiansen@nordiccreditrating.com
Sean Cotten, lead analyst, +46 732 32 43 78 sean.cotten@nordiccreditrating.com