Freehold

Freehold is the ownership form where you hold direct registered legal title to the home or property in Grunnboken (the Norwegian land register). You therefore own the property itself as real property (eiendom), not a share in a housing cooperative or a company that gives you an indirect right of occupancy. It is the most common ownership form for detached houses, two-unit houses, commercial property and a large part of the flat market (freehold flats are organised as owner sections).

As a freehold owner you hold independent title in Grunnboken. That means you can sell, mortgage or otherwise dispose of the property without consent from a cooperative or company, as long as the property is not encumbered by a restriction on disposal, a right of pre-emption or other encumbrances that prevent it. A mortgage is taken directly in your property and registered on your land register page. The ownership form gives maximum freedom of action and is the one banks, valuers and buyers see as the clearest, and it is typically priced somewhat higher per square metre than an equivalent housing cooperative home.

For flats, the freehold form is normally realised as an owner section. The building is still owned jointly (co-ownership), but each section is legally independent: you have an exclusive right of use to your flat and your co-ownership share of the common areas, all governed by eierseksjonsloven (the Norwegian Owner Sections Act). The transfer of title is registered in Grunnboken in the same way as for a detached house, and you receive a full ownership document (deed). Common costs, maintenance and the board work in parallel with a housing cooperative, but the ownership structure is the fundamental difference.

The most important practical consequence when you buy a freehold home is the document duty: 2.5% of the sale price when legal title to real property is transferred, paid by the buyer, under the Document Duty Act and administered by Skatteetaten (the Norwegian Tax Administration). The document duty does not apply to the transfer of a share in a housing cooperative or a share flat, only to freehold. Inheritance and gifts to a spouse are exempt. In addition, a registration fee is paid on the deed and the mortgage deed.

A freehold owner receives property tax issued directly by the municipality where it has been introduced, based on the matrikkel and municipal valuations or assessed wealth values. The assessed wealth value for a primary home is set lower than for a secondary home, and it forms part of your personal wealth basis. Maintenance, upgrades and structural changes are the freehold owner's own responsibility; for an owner section, responsibility for common areas and the building shell is shared, while internal renovation of the section itself is the individual section owner's business. The freehold form also allows letting without board consent (with an exception for owner sections, where more than one continuous letting period can be regulated under eierseksjonsloven).

For financing, banks see freehold as lower risk than a housing cooperative home and especially a share flat, since a mortgage in real property has stronger legal protection and is easier to realise on default. That typically gives a somewhat lower interest rate and a better loan-to-value ratio. Insurance is taken out individually for freehold (with an exception for common areas in owner section co-ownerships), and the premium follows the building value and risk exposure.

In Placepoint, freehold owners are identified as title holders in the property panel based on Grunnboken, and at the same time you see matrikkel information, encumbrances, valuation and assessed wealth value connected to the ownership form.

How it looks in Placepoint

In Placepoint you find this in the property panel:

From Placepoint's dictionary: Freehold

More information: Kartverket: legal title and transfer of title, Skatteetaten: document duty, Store norske leksikon: selveier

English: Freehold owner (fee-simple ownership of real property).

Common questions

What does freehold mean?

Freehold is the ownership form where you hold direct registered legal title to the property in Grunnboken. You own the property as real property, not a share in a cooperative or company.

What is the difference between freehold and a housing cooperative?

A freehold owner owns the property directly with registered legal title; a share owner in a housing cooperative owns a share in a cooperative enterprise and has a right of occupancy to the home. A freehold owner can sell and mortgage freely, pays document duty on purchase, and may be liable for property tax directly.

Is a freehold flat the same as an owner section?

In practice, yes. A freehold flat is almost always organised as an owner section under eierseksjonsloven. You have your own registered legal title to the section, and common areas are owned as co-ownership between the section owners.

Do I have to pay document duty as a freehold owner?

When you buy a freehold home, the buyer pays 2.5% document duty of the sale price, plus a registration fee. The duty does not apply to the transfer of a share in a housing cooperative or a share flat.

Can I let out a freehold home freely?

As a general rule, yes. A freehold owner is free to let out without board consent. For owner sections, the articles of association can regulate short-term letting beyond the limit set by eierseksjonsloven, in particular for letting beyond 90 days.