Types of Housing Purchases
Purchase by Foreigners or Non-residents
Terminology of Apartment Purchases
This page deals mainly with the "nuts and bolts"
or purchasing property in Finland. If you're looking
for a house or apartment to buy, see the Finding Housing or Estate Agents pages.
If you purchase a home, tax
credits are available for certain repair/renovation
costs, as well as home loan interest payments.
Types of Housing
If you intend to purchase property there are a few
common forms of doing so, and your rights &
obligations change with each one both before and
after the purchase.
In all cases you will probably also require a mortgage / home loan.
Depending on the type of housing, costs may often also include
transfer tax and,
particulalry important in the purchase of an old
house, renovation costs.
Buying an Apartment - Omistusasuminen
If you're buying an apartment,
chances are you will actually be
in a housing company. Please see Apartment Ownership and Shares in Housing Companies.
Find out whether costs such as hot water are included
in the monthly charges, or whether you'll be paying
for those separately. Transfer tax applies.
Buying a House - Omistusasuminen
Similarly to most countries, if you're buying a house
you are responsible for its maintenance and renovations;
and you also need to pay attention to the plot of
land and its surroundings. Transfer tax applies.
Part Ownership - Osaomistusasuminen
Initially the part-ownership tenant buys part of the
apartment by paying a percentage, usually 10-15%,
of the total price of the apartment. The total price
is agreed upon at this time, so market fluctuations
during the part-ownership period will not affect
the final price. The tenant then starts paying rent,
as a lessee, to the majority owner. The
rent does not accrue towards the purchase
price of the apartment. During
this phase, the tenant's obligations are based on
legal provisions for residential leases.
is usually possible to increase your share of ownership
during the residential period. In some apartments
the times you can buy additional shares are
determined in the shareholders' agreement. In other
apartmentss, shares can be purchased once
a year up to a maximum limit of 49%.
After a specified
time period (the period of the interest subsidy loan
- perhaps 5-12 years), the tenant
has the right to buy the apartment outright. At this
point the initial investment, and any further investments
made by the tenant to acquire a larger share, are
deducted from the purchase price. Once the tenant
has bought the apartment outright it is treated as
a standard apartment in a housing company, and status
and responsibility for maintenance are determined
by the Housing Companies Act.
Transfer tax applies
to part ownership property, assessed on the price
agreed at time of initial purchase.
Further information, & Applications: www.sato.fi > English > Resident
Right-of-Occupancy Apartment - Asumisoikeusasuminen
Right-of-occupancy agreements give residents certain rights similar to ownership
of their homes. Residents pay a right-of-occupancy fee (asumisoikeusmaksu
euroina) amounting to 15% of the purchase price, and the Housing Fund of Finland (ARA)
grants a loan for the remaining 85% of the purchase price. Residents then pay a
monthly occupancy fee, similar to rent. Right-of-occupancy schemes do
not ultimately entitle residents to purchase their homes, but the owners
of the housing may not unilaterally terminate
the right-of-occupancy agreement. Thus, residents
enjoy the same tenure as if they owned the apartment.
This may sound like you are paying a lot for a
"right to pay rent", but there are other
you leave the apartment your index-adjusted 15% fee
Also, monthly occupancy fees are often
a little less than rent for a comparable apartment.
Finally, the 15% right-of-occupancy payment is not
subject to transfer tax.
To apply for a right-of-occupnancy home the applicant
must obtain a queue number from the municipal housing
Further information, Property
search, Queue numbers, & Applications: http://www.asokodit.fi/english/
Purchase by Foreigners or Non-residents
In 2000 the government removed the requirement that a non-resident must obtain a permit to buy a secondary residential property in Finland, putting foreigners on exactly the same footing as Finns. However, foreigners are restricted from acquiring property in the Åland (Ahvenanmaa) archipelago, an autonomous, Swedish-speaking region of Finland. Foreigners need to obtain permission from the Finns to purchase property in Åland.
Non-residents intending to purchase property in Finland should contact an estate agent who should be able to help them through the buying processin Englishor or other major languages.
Tax - Leimavero
Transfer tax is imposed on transfers of real property
(ex. a house with land) and securities (ex. shares
in a housing company
when buying an aprtment). Tax on transfers of real
property is 4% of the transfer price, and 1.6% in
the case of securities.
Transfer tax is usually imposed on the purchaser.
Tax on securities has to be paid within 2 months from
the date of the deed and, in case of real property,
within 6 months. When a transfer is intermediated by
an estate agent, the transferee must pay the tax when
the transfer contract is made.
First-time home buyers are
exempted from the transfer tax subject to certain conditions:
see the Tax Advantages page
for more information.
Transfer tax exemptions apply in certain other
cases, for example gifts, inheritance,
and transfers through the Stock Exchange. For details
of these exemptions see the Finnish Tax Administration's PDF Transfer Tax.
of Apartment Purchases
This section expands upon some of the more complicated
terms relating to apartment purchases (see also the Real Estate Terminology page).
a basic understanding of the operation of Finnish housing companies.
|NB: When major work is required on the building,
the housing company usually obtains a loan to cover it. The housing company
recoups the money from the shareholders i.e. the apartment owners.
The share of the housing company loan per apartment is based on the size
of the apartment in m². The loan share may be paid in monthly instalments,
or in a lump sum.
||"Sale price". Price to be paid to current owner; this does not
include payment of any of the apartment's outstanding share of the housing
||"Free of debt sale price". This includes the payment to the current
owner PLUS lump sum payment of the apartment's outstanding share of the housing
|An advertisement in which Myyntihinta and
Velaton Myyntihinta are the same amount indicates that the housing
company has no outstanding loan. In this situation there will be no
|| If the housing company has a loan, and you do not pay
the velaton myyntihinta at the time
of purchase - thus freeing the apartment of debt to the housing company -
this will be your monthly payment towards the housing company loan.
When buying an apartment it's important to check whether
any building/renovation work has already been agreed upon for the near future;
if it has, the rahoitusvastike will be increasing!
|Apart from outstanding loans, housing companies
have other expenses which are also recouped from the shareholders:
||This is the monthly fee for services, general maintenance etcetera. The
charge per apartment is based on the size of the apartment in m²
||This is the combined cost of Rahoitusvastike + Hoitovastike
|Some costs are the responsibility of the housing
company (i.e. shared by all owners), and some are the responsibility of
individual apartment owners. Responsibility is indicated in advertisements
||Responsibility of owner
||Responsibility shared by owners
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