Secondary residence

Loan for secondary residence

A loan for a secondary home is a loan used to buy a home other than your main home, for example a holiday home or a rental property. Taking out a loan for home number 2 can be a good investment, but it is important to consider the costs and risks carefully before making a decision.

All rental homes are not secondary homes, and all secondary homes are not rental homes.

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Secondary housing is a tax term for housing owned by private individuals that cannot be characterized as primary housing or leisure property. Some rent it out, while others use it as a commuter home, holiday home or let their children live in it.

What does it take to get a loan for home number 2?

To get a loan for a secondary home, you will usually have to meet certain requirements, including a good credit score and an adequate income. Lenders will also assess the value of the home you want to buy, as well as any existing loans you have.

It is important to note that loan offers and interest rates may vary depending on the lender and your financial situation. You may want to compare offers from different banks to find the best loan for you.

It is also important to remember that taking out a loan for a secondary home can involve an increased financial risk. You will have to pay off two loans at the same time, and if you use the property as a rental property, you will have to deal with any problems with the tenant as well as maintenance and repair costs. Be sure to carefully consider whether you can afford to take on this risk before taking out a loan for a secondary home.


man who notes on a pad and puts money in a glass

How much equity do you need to buy a second home?
Previously, there was a requirement for an equity capital of 40%, but now the same requirement applies as for primary residences, which is 15% equity capital.
When you apply for a loan from the bank, the bank will take into account any interest rate increases in the future. This applies to both the primary home and the secondary home. The bank will also ensure that the total loan amount does not exceed five times gross income (including rental income).

Hand under several homes that hover above, both primary home and secondary home

What is secondary housing?

A secondary home is a home that is owned in addition to a main home/primary home. It can be a holiday home, a rental property or a home that is used as an investment. The difference between a secondary residence and a primary residence is that the main residence is the primary residence of the owner and is used as a residence, while the secondary residence is used for other purposes.

A holiday home is a home that is owned for recreational purposes, and is often located in another region or country. A rental home is a home that is owned to rent out to one or more people, and an investment home is a home that is owned to make money through buying, holding and selling homes.

There can be many reasons for owning a second home, such as having a place to spend holidays, to have an additional source of income through letting or to invest in property. It is important to carefully consider whether you can afford to own a second home and whether it is a good investment before buying one.

Tax on the rental of secondary housing

Generally speaking, rental income from a secondary home will be considered taxable capital income. A 22% tax will be calculated on the profit after deduction of expenses. Expenses that can be deducted include, among other things:
– interest expenses on any loans related to the home
– property tax
– maintenance and repair costs
– insurances and any expenses for property management.

It is also important to note that there may be different tax rules for renting out a secondary home that is used as a holiday home, compared to a secondary home that is used solely for rental purposes.

If you own a secondary home in Norway and are considering renting it out, it is recommended to seek advice from a tax expert to ensure that you follow all applicable tax rules and deductions.

The tax authorities calculate a housing value (calculated market value for housing) based on Statistics Norway’s statistical information on sold housing. In the calculation, your home’s location, area, year of construction and type of home are taken into account. The home’s housing value is equal to the home’s area multiplied by the price per square meter based on statistics on sold homes

The asset value is a given percentage of this housing value. Calculated with 25% on primary housing under 10 million (70% of market value on excess value over 10 million) and 100% on secondary housing because the latter is considered a money investment/savings.

Tax on the sale of a second home

You must pay tax on the gain on the sale of a second home. This is tax-free only in cases where you have lived in the home yourself (and had a registered address there) for at least one of the last two years.

The profit is entered in the tax return and is taxed as ordinary income at 22 per cent.

Do you want to invest in a rental property, but are unsure about tax rules, equity requirements and valuation? On this page you should know before you buy a secondary home that you plan to rent out.

Firstly, you should be aware of the tax rule e that applies to rental properties. This may vary between different countries and regions, and you may want to research this thoroughly before purchasing. In addition, you should be aware of any requirements for equity when applying for a loan for a secondary home. The banks may have different requirements for equity, and this may affect your ability to buy. In Norway, the general rule is that a home should not have more than 85% of its value in debt.

girl sits on living room floor with cups and paper and man stands upright by many cardboard boxes. young couple who have moved into a new home and are unpacking their things

Value estimate

  • Another factor that is important to consider when you buy a rental property is the valuation. You should be aware of what affects the value of the home, and investigate what the market price is in the area you are considering buying.
  • We help you check historical prices for the property you are interested in, what the average price is in the immediate area and what neighboring properties are selling for.
checklist for buying a secondary home

Rent out yourself, or through a broker?

  • Finally, it may be a good idea to consider whether you want to manage the rental process yourself, or whether you want to leave this to a rental company, e.g. Utleiemegleren . This can affect how much time and effort you have to invest in the project, and can thus have an impact on your profitability.
  • In summary, it is important to have a good knowledge of tax rules, equity requirements and valuation when you buy a rental property. Doing thorough research and having realistic expectations can help increase the chances of you making a good investment.

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