Norway's wealth tax trades millionaires for equality
Baku, November 24, AZERTAC
Sitting in his lakeside villa in the Swiss city of Lucerne, Borger Borgenhaug misses his grandchildren and the smell of the Nordic sea on a clear summer night.
The carpenter turned real-estate tycoon says that is the price he pays to escape Norway's beefed-up wealth tax – an annual levy that has driven hundreds of millionaires abroad while underpinning one of the world's most equal societies.
"The political climate in Norway has become increasingly hostile to business owners," Borgenhaug, who left in 2022, told Reuters.
With a wealth tax dating back to 1892 and a culture of openness that allows citizens to view the tax returns of others, Norway has more experience than most in squeezing the rich. Its model offers lessons for countries debating similar moves, from Britain to France and Italy, or even a city like New York.
The takeaway: a wealth tax will scare off some millionaires, but if set broadly enough, revenues can still be worth it.
The tax was a defining issue in Norway’s election in September, which returned the Labour Party to power. The party had raised the levy and tightened exit rules during its previous term.
Individuals pay 1% on net wealth between 1.76 million and 20.7 million crowns ($174,000–$2 million) and, since 2022, 1.1% above that. Exactly 671,639 people – about 12% of the population – paid in 2023.
Main homes enjoy a 75% discount on assessed value; shares and commercial property get 20%. Assets abroad are included, but debt is deductible.
Leaving Norway triggers an exit tax of 37.8% on unrealised capital gains above 3 million crowns - such as notional gains on shares that have gone up in value but are yet to be sold. Loopholes that allowed emigrants to defer payment indefinitely were closed in 2024.
The changes turned a trickle into a stream. Data from conservative think-tank Civita shows 261 residents with assets above 10 million crowns ($973,000) left in 2022 and 254 in 2023 - more than double the typical rate before the hike.
Business magazine Kapital's, ranking of Norway's 400 richest people shows 105 now live abroad or have transferred wealth to relatives who do. Some of their pictures hang on a "wall of shame" in the offices of the small, opposition Socialist Left party.
Supporters argue the tax acts as a redistributive backstop in a country that scrapped inheritance tax in 2014 and ranks among the world’s wealthiest thanks to oil, shipping and fisheries.
Norway funnels all proceeds from its oil and gas industry into a sovereign wealth fund and caps annual withdrawals at 3% of the fund’s value under a self-imposed fiscal rule.
This means it needs to find other sources of revenue.
"The wealth tax makes the overall personal tax system more progressive than income tax alone," Deputy Finance Minister Ellen Reitan told Reuters.
Revenue from it has climbed despite the exodus and now sits at 0.6% of GDP — not a trivial sum. For context, Britain’s Labour government is hunting for savings of a similar magnitude to help hit its fiscal targets.
Research by Norway’s statistics office shows entrepreneurs have enough liquidity to pay, and that the burden falls overwhelmingly on the richest. Another study suggests the tax may spur investment in human capital, o.
Norway remains among the world's most equal countries and ranks high for ease of doing business.
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