Decision on property tax in Ullensvang municipality set aside

The case concerns the calculation of property tax for an ilmenite smelting plant in Ullensvang municipality. The municipal Property Tax Appeals Board had determined the value of seven buildings at the facility based on their technical value. The owner of the smelting plant argued that the valuation should be based on the market value in a free sale – in practice the capitalised rental value – according to the main rule in the Property Tax Act.

The Supreme Court found that the appeals board's decision was based on an error of law, and the property tax decision was set aside.

When valuing commercial property, production equipment and installations should be excluded. The focus should be on the land and buildings. The main rule under the Property Tax Act is that the valuation should be based on the objective market value. Only if it is not professionally justifiable to determine the market value on this basis, should the value, according to generally accepted valuation principles for commercial property, be based on the technical value.

The ruling clarifies when the exception rule for valuing commercial property at technical value applies.

Read the judgment from the Supreme Court (Norwegian only) (PDF)

Area of law: Property tax law. Section 8 A-2 of the Property Tax Act. 

Key paragraphs: 58–60 

Justices: Bull, Høgetveit Berg, Hellerslia, Stenvik, Lund