Living in Norway? Here’s what the new state budget means for your personal finances

Kroner currencyPhoto: Gorm Kallestad / NTB
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Slightly lower taxes, more child benefits, and cheaper soft drinks. Here are the measures in the state budget for 2021 that will impact the wallets of Norwegians.

There are plans for cuts in income tax in the government’s proposal for the state budget, but it will be those who earn the most who will get the most significant cuts.

People with an income of NOK 300,000-400,000 a year will get a tax cut of NOK 300, while people with an income of NOK 500,000-600,000 will get a cut of NOK 500.

According to the budget proposal, if you earn more than NOK 1 million a year, you will receive an average tax cut of NOK 3,400 next year.

Child benefits and electric car taxes

Families with children will benefit from an increase in child benefits of NOK 300 per month for children up to six years. 

That will mean NOK 3,600 more to spend every year for those who have children in this age group.

Next year, those who own an electric car will have to pay an annual fee, which they have previously avoided. 

The rate will be the same as for motorcycles, NOK 5.65 per day, ie, just over NOK 2,000 a year.

Those who drive a petrol car will notice an increase in the CO2 tax. 

It will be increased from NOK 1.26 per liter to NOK 1.37 per liter. 

BSU and soft drinks

The government also proposes to tighten the scheme for Housing Savings for Young People (BSU). 

People who already own a home will no longer receive a tax deduction when they save through BSU. 

In return, the maximum annual savings amount is increased from NOK 25,000 to NOK 27,500. 

The government will save NOK 460 million annually on the move.

The budget also contains good news for soft drinks: the government proposes a 30% cut to soft drinks taxes.

“Those who have a high consumption of soft drinks will save something. 1.5 liters of soft drinks cost around NOK 32 in a grocery store today. They will be NOK 2-3 cheaper,” consumer economist Silje Sandmæl in DNB told news bureau NTB.

Here are some of the other changes:

The government proposes to increase the amount limit for tax-free gifts from employers to workers from NOK 2,000 to NOK 5,000. Additionally, influenza vaccines paid for by employers will be tax-free.

The exemption card limit, i.e., how much people can earn without tax, is increased from 55,000 to 60,000 kroner.

The government will remove the VAT exemption for alternative treatment and cosmetic surgery unless they are medically justified and financed by the public sector.

The air passenger tax, which was temporarily removed due to the corona this year, will be reintroduced next year.

The property value of cottages and holiday homes will be increased by 20%. This will impact those who already pay wealth tax and those who are on the verge of doing so.

Those who live in expensive primary housing can also get a jump in taxes. The tax value for homes worth more than NOK 15 million is being increased.

The tax-free benefit for those buying shares from the company they work for at a discount is increased from NOK 5,000 to NOK 7,500 kroner, but the rate is also increased from 20 to 25%.

NOK 120 million is set aside for a pilot project with a national leisure card scheme, through which children and young people will receive grants for leisure activities.

The taxes on tobacco, alcohol, and sweets are all increased by 3.4-3.5%.

© NTB Scanpix / #Norway Today

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