In 2022, all homeowners will lose their tax advantage – E24

In the state budget proposal, the government eliminated the BSU savings tax deduction for those who have already bought a home.

So far, everyone who saves the maximum amount of 25,000 crowns at BSU has been able to recoup 5,000 crowns in tax up to and including the year he turned 33. This also applied even if you had bought a house without using the money that was in the BSU account.

However, the tax deduction will return if you sell the home you own without buying a new one, the Finance Ministry said in a press release.

The money in the BSU account can only be used to buy a home or pay down home debt; otherwise, you will have to repay the tax benefits you already received.

With the new proposal, the government has increased the maximum annual savings limit in BSU to 27,500 as of 2021. Thus, the tax deduction at a maximum amount of NOK 5,500 per year.

The total amount you can save in BSU is still NOK 300,000 plus interest.

Also applies to those who have already purchased

The new rules apply to those who will buy a home before age 33, and to those who already own a home but still have money in their BSU account.

– The changes apply to all owners of a home, regardless of when the home was purchased, writes communications consultant Kristina Tagmatarchi Storeng from the Ministry of Finance to E24.

But the tax changes are meant to take effect from 2021, and everyone who saved at BSU in 2020 will receive the tax benefits in the next deal.

– No changes are proposed for 2020. A person who bought a home this year, or who owns a home before, will continue to receive a tax deduction for 2020, says Storeng.

– Whether you get a BSU deduction in 2021 depends on whether you own a home as of December 31, 2021.

It will bring young people to the housing market.

The purpose of the BSU plan is to attract young people to the housing market, said Finance Minister Jan Tore Sanner in the press release.

– I interpret it in the sense that the scheme is sharpened more so that it hits the group that struggles more than others, that is, young people who have difficulties entering the property market, says consumer economist Derya Incedursun in Nordea.

– More people who have saved for several years in BSU suddenly lose the tax advantage, but the most important thing is that those who cannot enter the housing market take full advantage of the scheme, says Incedursun.

Can still pay

– It is a motivation for young people to save in BSU because you have the tax advantage. But this may make more young people think of other savings alternatives, Incedursun says.

Note that the funds have become very popular and that they can be a good way to save.

– But it depends on the time perspective, because you run a risk with the funds. Historical returns are not a guarantee of future performance.

She believes that funds can be a good solution if she has to save for many years.

– BSU does not have the same risk and the accounts tend to have a higher interest rate than other savings accounts, says the Nordea economist.

You still have to spend the BSU money on housing, otherwise you will have to pay back the tax deductions you have already received.

– Can you afford to wait until next year to buy a home and get the tax benefit for one year you have saved?

– It depends on where in the country you live. If you live in Oslo, you will see house prices go up, while in Stavanger, for example, prices have gone down. You need to see if you benefit from saving the tax deduction rather than buying a home right away, Incedursun says.

It will increase the maximum limit

The Norwegian Real Estate Association (NEF) calls the BSU changes “a small step in the right direction.”

– But when the scheme is now toughened up so it’s reserved for first-time buyers, it should also be strengthened for first-time buyers, director Carl O. Geving tells E24.

In fact, the government is increasing the annual saving limit from 25,000 to 27,500 crowns, but the main broker does not believe that it will be maintained.

– The total savings limit remains unchanged at 300,000. If you really want to help young people, we think the government should launch an escalation plan in which the limit is gradually increased to 450,000 crowns, Geving says.

He points out that the sharp rise in house prices in recent years means that many people need more than the current limit of NOK 300,000 to meet the mortgage regulations’ requirement of 15% of equity.