Who can buy property in Finland?
European Union citizens, along with citizens and companies from EEA states (European Economic Area), have the freedom to acquire properties in Finland, including lands, houses, and apartments, on equal terms with Finnish citizens. However, it´s crucial to highlight that a real estate permit is necessary for private individuals who are not nationals of EU or EEA states. Notably, individuals with dual nationality are exempt from obtaining a permit if one of their nationalities is from an EU or EEA country.
Do the research
When considering purchasing real estate, factors such as job opportunities, infrastructure, amenities, and lifestyle preferences should be taken into account. Additionally, consulting with local real estate professionals or conducting up-to-date market research is crucial for making informed decisions.
Here are several sought-after destinations for real estate investments:
- Helsinki - As the capital and largest city in Finland, Helsinki is a major economic and cultural hub. The demand for real estate is generally high in and around the city.
- Espoo and Vantaa - These are neighboring cities to Helsinki and are also part of the Greater Helsinki metropolitan area. They offer good accessibility to the capital and are attractive to both residents and businesses.
- Tampere - Located in southern Finland, Tampere is the third-largest city and a significant economic center. It has been growing in popularity, offering a blend of urban amenities and natural surroundings.
- Turku - Situated on the southwest coast, Turku is one of the oldest cities in Finland. It has historical charm and a strong maritime presence.
Where to find properties online:
The Finnish banking system permits non-residents to apply for property loans, subject to specific conditions and requirements. Typically, foreigners seeking a property loan in Finland must hold a valid residence permit, furnish necessary documentation including proof of income and identity, and meet the criteria set by lending institutions in the country.
Several banks in Finland, such as Nordea Bank Finland and Danske Bank Finland, are known to provide mortgages to foreigners. Finland’s new housing loan interest rates stood to 4.37% in September 2023.
Property Visits and Preliminary Contract
Before proceeding with the purchase of a property in Finland, it is recommended to enlist the services of a professional legal real estate agent. The customary practice involves completing a preliminary agreement before finalizing the property sale agreement. Additionally, when acquiring property in Finland, involving a local lawyer can offer valuable support in navigating legal intricacies, contributing to a smooth and successful transaction.
Due Diligence and Sales Contract
It is advisable to enlist the assistance of a local lawyer to ensure a smooth and successful property transaction. A local lawyer can assist in various aspects, including the signing of a purchase agreement (Kaufvertrag) with the seller, conducting a title deed search (Kiinteistörekisteriotteen tarkistus), and guiding you through the process of obtaining permits and approvals. They play a crucial role in ensuring that all taxes and fees, such as property tax and notary fees, are paid correctly and in compliance with Finnish laws.
In addition, engaging a local due diligence service can provide valuable assistance by conducting a Technical Due Diligence (TDD). The purpose of a TDD is to outline the technical and financial risks associated with the property for the next ten years, recommend necessary measures, provide cost estimates for budgeting, and offer other significant insights about the property that can be beneficial in the decision-making process.
Property Buying Costs and Taxes in Finland
|Property Transfer Tax
|1.60% - 4.00%
|Real Estate Agent Fee
|3.00% - 5.00% (+24% VAT)
|Costs paid by buyer
|1.65% - 4.05%
|Costs paid by seller
|3.00% - 5.00%
|ROUNDTRIP TRANSACTION COSTS
|4.65% - 9.05%
|Source: Global Property Guide