Homeowner or owner of recreational property – guidance for handling your taxes
Citizens of other countries can own dwellings and recreational homes in Finland; buy them, receive them as inheritance, and sell them to any buyer.
The following categories of home ownership are typical in Finland:
Real estate ownership – you own a house or a summer home including the land where it is located.
Shareholding in a housing company – you own an apartment while an entity known as a “housing company” owns the building where the apartment is located.
If you receive property, or if you sell property to a new owner or transfer it otherwise, you become liable for the following taxes:
- Buying a home or a summer home: the transfer tax
- You inherit a home or receive it as a gift: inheritance and gift taxes
- Being a homeowner: the real estate tax
- Selling your home or summer home: taxes on the capital gain
In addition to paying the purchase price for a dwelling or summer home in Finland, you must pay transfer tax. However, if you are a first-time homebuyer and you fulfil the requirements that apply, you are relieved from transfer tax but you must still submit a tax return on it.
After you have sent the return (and if you are not a first-time homebuyer, paid the transfer tax), you must take action to make sure that you become registered as the owner of the property. The registrations are not handled by the Tax Administration. To have your name entered in the appropriate registers on home ownership, the steps to take will vary depending on the category of the home and on how you became the owner.
Example: Apartments: after you have shown the housing company’s manager a certificate of paid transfer tax, your name is entered in the register of shareholders as the owner of your apartment. Houses: after you have completed the electronic form to apply for registration of title (or completed the paper form), added the required enclosures and sent it the National Land Survey, your name is entered in the public title register.
For more information, see guidance on transfer taxes and registrations:
You may inherit, or be given a gift of, a dwelling or a summer cottage. In addition, it is possible that you buy property at a price below its true market value. In the above circumstances, you must pay either gift tax or inheritance tax.
Receiving a gift and paying gift tax on it
You are liable to pay tax if one donor gives you several gifts in the course of 3 years and their total value exceeds €5,000.
After you have received a gift, you must
- Find out what the gift’s fair market value is. This means the probable selling price on the date when you received it.
- Submit a gift tax return.
- Pay the gift tax.
Receiving an inheritance and paying inheritance tax on it
If you are a foreign citizen and you receive a property located in Finland by inheritance, taxation may vary. The following factors are important:
- The country where the deceased person was living and considered a tax resident.
- The country where tax authorities treat the inherited property as subject to taxes.
- The property’s fair market value – in other words, its probable selling price on the date when you inherited it.
You may additionally have to deal with other taxes, not only the Finnish inheritance tax.
Example: If you inherit a house, you must pay real estate tax on it every year.
The way you must handle your inheritance tax depends on whether the person who died lived in Finland or outside Finland.
After you have become a homeowner in Finland and the category of your property is real estate, you must pay tax on it every year. A real estate unit is comprised of the buildings, the ground, or both. As a result, the base for your real estate taxes may be your house, the land and the garden, and your summer cottage. However, no real estate tax is collected directly from you if your home is a housing-company apartment. The Tax Administration charges the building’s real estate tax to the housing company that owns the building where your apartment is located.
After you sell property in Finland, you must submit a tax return to the Finnish Tax Administration to provide the required information about the sale. If you made a profit, you are required to pay capital gains tax.