The Norwegian government is revising its property valuation model to ensure that the wealth tax system is both fair and effective. The update aims to correct systematic underestimations of high-end properties, where luxurious homes have been appraised at significantly lower values than more modest residences, resulting in an unequal tax burden. Currently, only 15% of taxpayers in Norway pay wealth tax, attributed to a low exemption threshold and adjustments designed to favor real estate over other asset classes like stocks.

In the recently passed budget, the government has taken steps to enhance property value assessments by raising the threshold for high valuations from 10 million to 14 million Norwegian kroner. This change is part of a broader commitment to ensure that property taxes remain lower than those applied to financial assets, allowing homeowners to benefit from a more favorable tax environment. The government believes it's crucial that the valuation model used accurately reflects the value of properties to avoid inequities in taxation, emphasizing that the previous model had significant flaws.

This initiative follows a decision by the Storting in 2021 to update the property assessment model, aiming to eliminate systematic biases that undermine tax fairness. By addressing these inequities, the government hopes to foster a more just economic environment for property owners. As high-value properties often contribute significantly to national wealth, refining the taxation model can also have broader economic implications for public revenue and property market dynamics.