Renovations, improvements and construction work in real estate taxation
Renovations of and improvements to the real estate unit, as well as other construction work, affect its real estate taxation. The Tax Administration receives information from other authorities on newly constructed buildings and on changes made to buildings if a building permit has been applied for.
Table of contents:
- Renovation and improvement
- Construction work and unfinished buildings
- Small buildings
- Demolished building
- Table of renovations and improvements
- Do the real estate details require corrections?
Renovation and improvement
When you receive your real estate tax decision, make changes to the real estate details if
- you have renovated the real estate unit and its equipment level (electricity, water pipes, drainage), heating system or area has changed
- you have made improvements to the real estate unit, i.e. the unit has been upgraded and improved compared to its previous state.
The Tax Administration always assesses the effect of renovations on real estate tax on a case-by-case basis. In most cases, renovations and improvements increase the unit’s taxable value and therefore also raise the real estate tax. If an old building is renovated, its real estate tax increases compared to a building in its original condition.
You will see the final impact of the improvements on real estate tax in your new real estate tax decision.
See which types of renovation must be reported
Construction work and unfinished buildings
The Tax Administration receives information from other authorities on newly constructed buildings and on additions to buildings if a building permit has been applied for. The new building or addition should be included in the real estate tax decision you receive in the year following the year when the construction work started. If this information is not included in the decision, add the required details after you have received the decision.
The amount of real estate tax payable on an unfinished building is determined by the building’s percentage of completion on the last day of the previous year. Check the information in the decision. The municipal building inspector or the construction supervisor responsible for the construction project can provide a statement or certificate of the percentage of completion. If you do not have documentation on the percentage of completion, you must estimate it yourself. If you do not report the percentage of completion, we will estimate it based on the construction’s start date and completion date.
Small buildings
If the area of the new building is 5 m2 or less, you do not need to report it or pay real estate tax on the building. If the area of the new building is more than 5 m2, the building must be reported – even buildings like an outdoor cooking shed, a children’s playhouse or a carport. However, you do not need to report details on a a pier for swimmers and boats.
Demolished building
The Tax Administration does not always receive information on demolished buildings. If a building included in the decision has been demolished, correct the information by removing the building from the real estate details and by giving the date on which the building was demolished. If the building existed on 1 January 2024, taxes on it are still paid in 2024. If no permit was requested for the demolition, also notify the municipality where the building was located.
Table of renovations and improvements
The table below lists the most common types of renovations and improvements. Check in the table whether the work conducted at your property must be reported for real estate taxation.
| Renovation or improvement | Does this work have to be reported? |
|---|---|
| Adding water pipes, a drainage system or electricity to the building, or renewing these | Yes |
| Installing mechanical air conditioning | Yes |
| Changing the heating system, e.g. switching from direct electrical heating or from heating by oil heater or wood-burning stove to a hot-water radiator system | Yes |
| Changing the heat source, e.g. switching the hot-water radiator system’s heat source from oil to wood | No |
| Adding a WC to a leisure property (when the WC is flushable with water and connected to a sewer) | Yes |
| Adding a chemical toilet or an electronic dry toilet to a leisure property | No |
| Converting an unheated attic or basement into a living space | Yes |
| Redecoration (wallpapers, flooring, etc.) | No |
| Plumbing work for bathroom or wet room | No |
| Replacing kitchen cabinets and appliances | No |
| Replacing entrance doors and windows | Yes |
| Renewing waterproofing for roof | Yes |
| Renewing the coating of exterior walls | Yes |
| Installing additional external insulation | Yes |
| Improvement of the entire building to be comparable to a new building | Yes |
| Constructing a pier for swimmers and boats | No |