Gift-like sales
If property is sold to someone for a price lower than the fair market value, i.e. the selling price is lower than the market value, the Tax Administration will consider it a gift.
If you buy an asset and the price you pay is no more than 75% (¾) of the fair market value, the transaction is a gift-like sale and you may have to pay gift tax. In gift-like sales, the value of the gift is the difference between the fair market value and the selling price.
Example: At a date that falls within the 2026 year, Antti sells his daughter Liisa an apartment for €130,000 but its fair market value is €200,000. The selling price is 65% of the fair market value (€130,000 / €200,000). From the perspective of gift taxation, Liisa is getting a gift worth €70,000 (fair market value €200,000 minus actual purchase price €130,000). Liisa is in tax bracket 1, and gift tax on a gift worth €70,000 is €6,300 in 2026.
How do I calculate the selling price in a gift-like sale?
The selling price or consideration includes all things of monetary value that the buyer gives to the seller in connection with the transaction.
- the amount that the buyer pays to the seller in cash
- any debts transferred to the seller
- benefits that the buyer agrees to give to the seller later, including life annuity or pension
- assets or property that the buyer gives to the seller (the consideration consists of the fair market value of such assets)
- other things at the buyer's responsibility, e.g. if the seller has the right of occupancy and the buyer pays for electricity and heating.
Example: seller's debts transferred to the buyer
Matti and Kati agreed about the following real estate deal: The property’s fair market value is €150,000. When Matti bought it, he borrowed money from the bank. Today, the remaining balance is €50,000. Kati agrees to pay back the loan to the bank, and the loan is transferred to Kati.
Because the loan is transferred to Kati in connection with the donation, Kati is considered to have paid Matti €50,000 as consideration for the gift. The remaining value of the gift is €100,000 (€150,000 – €50,000).
If Matti and Kati are in tax bracket 1, gift tax, in 2026, on a gift worth €100,000 is €9,900.
If Matti and Kati are in tax bracket 2, gift tax, in 2026, on a gift worth €100,000 is €23,975.
- a part of the donated property retained by the seller (such as a parcel of land not included in the sale)
- an apartment-specific share of an unpaid housing-company loan, which reduces the apartment's fair value
- a right of possession, occupancy or use that remains with the seller after the sale, provided that such a right does not require anything from the buyer (e.g. the right of occupancy does not include heating payable by the buyer)
- a right to take firewood or fell timber, retained by the seller.
If the right to take firewood is reserved, how does it affect the value of the gift?
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