Value of real estate and real estate tax rates

Real estate tax is calculated by multiplying the taxable value of a real estate unit with the real estate tax rate. A real estate unit includes buildings and the ground they are built on.

A real estate unit is comprised of the buildings, the ground, or both

A building’s taxable value is based on its replacement value. The basis of the replacement value is determined by an annual decree issued by the Ministry of Finance. The replacement value depends on what features the building has and what it would cost to build it again. The amount of tax is based on the tax rate that the municipality has imposed on buildings.

"Ground" refers to an area of land included in a real estate unit. The value of the ground is determined by its area and type. The amount of tax is based on the tax rate that the municipality has imposed on the ground type.

Real estate tax rates

Real estate tax is calculated by multiplying the value of the real estate unit with the real estate tax rate. The tax rate depends on the municipality where the real estate is located.

Buildings that are used for permanent living have a different tax rate than leisure properties and production facilities, for example. The tax rate is determined by the actual use of the building. If the building is used for several purposes (e.g. one part is used for living and another as an office), the tax rate is based on the primary use of the building.

The tax rates are determined by the municipality every year. Municipal real estate tax rates fall within the following ranges:


General real estate tax rate on ground	1.30−2.00%
Tax rate for permanently used residential buildings Used also for buildings located in the yard of such a residential building, such as saunas, garages, and other utility buildings.	0.41−1.00%
Tax rate for other residential buildings Used e.g. for leisure properties and buildings located on the same plot of land as such property, such as utility buildings, saunas, storage facilities, or sheds.	0.93–2.00%
General real estate tax rate for buildings Used e.g. for production facilities, machine sheds, and industrial buildings.	0.93–2.00%
Tax rate of unbuilt site The tax rate on unbuilt sites is usually between 2% and 6%. However, municipalities in the greater Helsinki area are required to set this rate at 3 percentage points higher the general real estate tax rate. Nevertheless, the maximum tax rate on unbuilt sites is 6.00%.	2.00–6.00%
Non-profit use This purpose of use is applicable to a building and its ground area owned by a non-profit corporation, if the building located on the real estate unit is primarily in general or non-profit use.
Tax rate of certain establishments The municipal council can determine a separate tax rate for buildings and structures included in a power plant or permanent repository for nuclear waste. This tax rate cannot be higher than 3.10%.

In the Åland Islands, real estate tax is paid to municipalities annually according to the local legislation on real estate taxes. Read more about the special characteristics of real estate taxation in the Åland Islands (section 6) (available in Finnish and Swedish, link to Finnish).