Finland: Overview

RENTAL YIELDS

Last Updated: Aug 03, 2009

Yields in Helsinki uninspiring

Yields for apartments in Helsinki are uninteresting, at around 4.73%.

Prices per square metre range from €4,955 to €5,690, the average being €5,334.

Read Rental Yields  »

TAXES AND COSTS

Last Updated: Oct 28, 2008

Rental income taxes are generally high in Finland

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	23.8%	23.8%	23.8%
Click here to see a worked example
Source: Disclaimer

Rental Income: Rental income is taxed at a flat rate of 28% and income-generating expenses are deductible from the gross rental income.

Capital Gains: Capital gains are taxed as capital income at a flat rate of 28%.

Inheritance: Inheritance tax is imposed at progressive rates of 10%, 13% and 16%.

Residents: Residents are taxed on their worldwide income.

Read Taxes and Costs  »

BUYING GUIDE

Last Updated: Mar 08, 2007

Buying costs are low in Finland

Roundtrip transaction costs are around 8.66% to 9.88% of the property’s price. Real property transfer tax of 4%, usually paid by the buyer, is sometimes included in the selling price especially if the transaction involves an agent. It takes about 14 days to complete the three procedures needed to register a property.

Read Buying Guide  »

LANDLORD AND TENANT

Last Updated: May 30, 2006

Tenant protection laws are lenient

Finland law and practice is neutral between landlord and tenants.

Rent: Tenancies are generally unregulated. Landlord and tenant may freely negotiate rents, but the courts may reduce the existing rent if it significantly exceeds the current average market rate charged on comparable apartments in the area.

Tenant Security: The landlord must give a termination notice of at least six months if the tenancy has continuously existed for more than a year, and a three-month notice is mandatory for leases existing for less than a year.

Read Landlord and Tenant  »

ECONOMIC GROWTH

Last Updated: Aug 13, 2009

Falling exports push Finland to recession

Finland’s small population of 5.3 million, and its huge land area (338,145 sq. km), make it one of the world’s least densely-populated countries. Its GDP per capita stood at US$52,000 in 2008. It is the only Nordic country to have adopted the euro as its official currency.

Finland went through a severe crisis when the Soviet Union collapsed in 1991. Though it had enjoyed a liberal democracy and a free market economy since World War II, economically, for decades its main business was as a backdoor import channel for the Soviet Union. Almost half of Finland’s foreign trade till the end of the 1980s was with the Soviet Union.

After the shock, the economy bounced back and the last decade has seen a boom. Finland experienced strong growth from 2004 to 2007 (an average of 3.9%. much higher than the euro area average). But the economy is vulnerable to the fortunes of the information and communications technology sector, a major driver of GDP growth since the mid-1990s. Exports traditionally account for around 45% of GDP.

In Q1 2009, the volume of exports contracted by 25.5% y-o-y. Because of this, GDP is expected to fall by as much as 5.7% in 2009. Unemployment rose to 9.1% in June 2009. It is expected to rise to more than 10% by the end of 2009.

To address deflation and recession, the government has introduced spending increasing and tax cuts. However, these measures, combined with the fall in government revenues, are expected to push the government into a budget deficit, the first time since 1997. The budget deficit is expected to be around 2.5% of GDP, a reversal of the budget surplus from 2000 to 2008, averaging at 4% of GDP.