Land value capture instruments are used in the country (Table 2.42). Municipalities frequently negotiate developer obligations to compensate the added impacts of a new project on existing or new local infrastructure. Private landowners can execute land readjustment projects for urban densification and redevelopment projects, but rarely do. The three levels of government make moderate use of strategic land management operations, as long as they already own land or have the necessary funds for acquisition. There is no legal framework of charges for development rights.

Norway has a two-tier subnational government system, composed of 11 counties and 356 municipalities, as per the 2020 administrative reform. The city of Oslo is both a county and a municipality (OECD/UCLG, 2019, p. 388[1]). The county governor acts as the representative of central government in each county and supervises local government activities (Article 59 of the Local Government Act). Municipalities, as the main planning authorities, are in charge of local strategies, master plans, and local zoning plans (OECD, 2017, p. 161[2]).

The national government creates the legal framework of land value capture, which is the Planning and Building Act (2008) including supplementing regulations. The country does not have a long tradition of land value capture tools. The Planning and Building Act is used to ensure that developers contribute to actual infrastructure improvements and the cost of common utilities in a specific development, which must be justified in legally binding land use plans.

Developers have to compensate the impacts that the new project generates on infrastructure located within or adjacent to the project. Local governments frequently use developer obligations and collect the contributions.

Developers negotiate with municipalities to define what amenities are necessary for a high quality development and how the new development project impacts existing infrastructure. Negotiation follows processes outlined in the Planning and Building Act. Local governments have high level of discretion in issuing development approvals and negotiating with developers. The basis of any negotiation is the land use part of the municipal master plans or local zoning plans (§ 11-12). The procedure is specified in part three of the Planning and Building Act, §17).

The charge is paid in cash or through the in-kind provision of land, public space, or public infrastructure, such as roads, parking, public transport, and other public utilities. Both forms of payment may be admitted. The in-kind contributions may correspond to new infrastructure and common utilities that are afterwards transferred free of cost to the municipality. Developers pay the charge upon obtaining the building permit.

The level of implementation varies across municipalities, depending on local real estate dynamics and local capacities. Municipalities with a dynamic real estate market find the instrument to be more relevant, while smaller municipalities where fewer developments take place use developer obligations less often.

Developers operating in small markets often perceive the charge to be excessively onerous and the municipalities tend to refrain from asking for developers’ contribution in such areas.

Local governments acquire and retain lands in advance of needs for the purposes of urban renewal and capture of capital gains. The national, regional and local governments lease public land to generate public revenues. Strategic land management is rarely used in the country.

When municipalities acquire land, they do so in reason of a specific opportunity or in anticipation of future needs for social services. Land is acquired in a scattered manner, through debt financing at market price or at a reduced price, in return for granting landowners a stake in subsequent development projects.

Municipalities may carry out land development in accordance with spatial and land use plans, which includes basic physical preparation, provision of public utilities and construction of green spaces and parks. However, in most cases, developers conduct these tasks and afterwards transfer the public equipment free of cost to the municipality (see section above on developer obligations).

Municipalities sometimes own land and conduct planning and basic physical preparation. Depending on the purpose of these operations, they may sell the developed lands to private actors, via auctions under the highest bidder criteria. Some municipalities sell land as part of their housing policy, in which case the public tender involves other criteria beyond sales prices, such as unit layout and maximum sale price per unit. Municipalities may transfer any land that they own to an agency designated to manage municipal property. In all, they recover investments through the sale or lease of the developed plots.

Leasing is not very common because governments hold little land available for lease. Land lease contracts range from 20 to 50 years, with possibility of renewal. The national government regulate the process of setting the rate, giving the municipalities power of attorney to set the exact ground rents. Payment can be done through recurrent installments, and no exemptions are granted. Leaseholders may transfer the lease in the market or sublease it to a third party.

Due to lack of financing, public land acquisition is scarce, and hence public land lease plays a minor role for municipal revenue.

Land readjustment has been used in a few occasions in urban planning or urban development. The law enables private landowners to conduct farmland consolidation and post-disaster reconstruction, and this is frequently used. Land readjustment projects for the purposes of urban development or renewal is less common, in particular when the readjustment includes redistribution of urban land values.

The local zoning plan (reguleringsplan) may contain norms about land readjustment if it is necessary for urban redevelopment projects. Two thirds of property owners must agree with the project for it to be executed. In most cases the landowners cooperate without using the readjustment law, or one developer acquires all land that is necessary to start a development project. In other occasions the developers merge their properties and establish a single purpose joint venture to accomplish the project.

Both municipalities and private landowners can enforce the participation of resisting landowners through expropriations. The compensation is subject to discretion, as per the Law on public land take and expropriation (Lov om oreigning av fast eigedom). Expropriations are rarely carried out, as it is politically controversial.

In the rare cases of urban land readjustment, the plot reallocation is based on both value and surface area. The characteristics of readjusted plots vary on a case-by-case basis. Landowners can exchange reallocated plots for cash. Third party investors, such as developers, can receive readjusted plots in return for their investment.

The challenges to implementation include low levels of technical administrative capacity and resistance by landowners, who frequently appeal against the arrangement.


[3] OECD (2022), “Subnational government structure and finance”, OECD Regional Statistics (database), (accessed on 13 January 2022).

[8] OECD (2021), “Subnational government structure and finance”, OECD Regional Statistics (database), (accessed on 25 November 2021).

[2] OECD (2017), Land-use Planning Systems in the OECD: Country Fact Sheets, OECD Regional Development Studies, OECD Publishing, Paris,

[1] OECD/UCLG (2019), 2019 Report of the World Observatory on Subnational Government Finance and Investment - Country Profiles, OECD/UCLG.

Metadata, Legal and Rights

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Extracts from publications may be subject to additional disclaimers, which are set out in the complete version of the publication, available at the link provided.

© OECD/Lincoln Institute of Land Policy 2022.

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at