Transfer of residential property from a limited liability company to its sole shareholder triggered ordinary document duty

The Supreme Court has recently considered the scope of the special rule set out in Section 1, second paragraph, of the Resolution on Document Duty.

The case concerned a residential property in Oslo that had been owned since 1919 by a limited liability company. The company was dissolved in 2003, but title to the property was never transferred in the Land Register to a new registered owner. The property consisted of a single residential unit and was occupied by the company's sole shareholder.

In 2024, the shareholder applied for registration of the transfer of title from the company to himself, on the basis that the transfer fell within the special rule in Section 1, second paragraph, of the Resolution on Document Duty. Under that provision, document duty is limited to NOK 1,000, rather than the ordinary duty of 2.5 percent of the property's market value.

The Norwegian Mapping Authority refused to register the transfer on that basis, holding that the transfer was not covered by the special rule providing for reduced document duty. The shareholder appealed to the Court of Appeal, which dismissed the appeal.

The special rule in Section 1, second paragraph, applies to transfers of title in connection with the dissolution of housing cooperatives and housing companies (boligaksjeselskaper). The question before the Supreme Court was therefore whether a company owning a residential property consisting of only one dwelling unit and having only one shareholder could be regarded as a housing company within the meaning of that provision.

The Supreme Court held that both the decision of the Norwegian Mapping Authority and the ruling of the Court of Appeal were based on a correct interpretation of the law. Placing particular emphasis on the wording of the provision and the legislative purpose behind the introduction of the special rule, the Court concluded that the term “housing company” (boligaksjeselskap) must be understood as referring to a company serving the same purpose as a housing cooperative, but organized as a limited liability company. In the Court's view, a limited liability company owning a residential property consisting of only a single dwelling unit therefore falls outside the scope of that concept.

The judgment clarifies which transfers of title qualify for the reduced document duty available under the special rule in Section 1, second paragraph, of the Resolution on Document Duty.

Source: Supreme Court