In Norway, acquiring certain types of properties, particularly agricultural land, may require a concession, or permission, from the authorities. This requirement is part of Norwegian legislation aimed at ensuring that agricultural properties remain in the hands of those qualified to operate them and are used for food production. The Concession Act is the tool used by society to achieve this purpose. In this blog, we explain what a concession is, which exemptions apply, and what you need to know to avoid potential legal challenges.
What is a concession?
A concession is a permit that must be obtained from the municipality to acquire properties that fall under the Concession Act. The general rule is that any acquisition of property, leasehold, tenancy rights, or similar use rights that will last more than 10 years triggers the need for a concession. This also applies to acquiring rights that significantly limit the owner's ability to manage or economically benefit from the property.
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Exceptions to the concession requirement
There are several exceptions to the concession requirement. For example, a developed property up to 100 acres, where the fully cultivated land does not exceed 35 acres, is exempt from the concession requirement unless the municipality has imposed a concession requirement by regulation. There are also exceptions when property is transferred within close family, although the new owner may be required to reside on the property.
Self-declaration vs. Concession application
When acquiring a property, you must determine whether you need to apply for a concession or if you can submit a self-declaration of concession exemption. A self-declaration is used when the property falls under the exceptions to the concession requirement. If the property requires a concession, you must apply for it within four weeks after the agreement is made, or the property is taken over.
The importance of clarifying concession requirements
It is crucial to clarify the property's concession status early in the sales process. Failing to apply for a concession when required, or violating existing concession conditions can result in the authorities demanding that the transfer be reversed or that the property be sold to someone who can obtain a concession. In extreme cases, the property may be subject to forced sale.
Also read: Norwegian property tax for residence and commercial properties
Are you planning to buy property that requires a concession?
The Concession Act is an essential part of Norwegian agricultural policy, ensuring that agricultural properties are used for their intended purpose. Therefore, it is important to investigate whether the property you wish to purchase requires a concession and, if so, apply for it in a timely manner. This will help you avoid potential legal issues and contribute to maintaining Norwegian agricultural traditions.
At Magnus Legal, we have extensive experience with both the purchase and sale of property requiring a concession, as well as the concession application process. Feel free to contact us – we’ll guide you safely through the entire process.
NEED HELP PURCHASING A PROPERTY IN NORWAY?
We know Norwegian Property Law. Contact us today for assistance.