How to Buy a Property in Finland: a Detailed Guide and a Market Analyst's Comment

In this guide, we will tell you how to buy a property in Finland, what additional expenses to expect when buying, how much apartments in this country cost and how fast prices are changing. 

Step-by-step procedure for buying property in Finland

Let's begin with the most crucial. Buyers from the European Union and the European Economic Area (EEA) who wish to purchase property in Finland must first obtain approval from the Ministry of Defense of that nation. For this purpose, it is necessary to apply to the ministry in electronic form. Such rules have been in force since 2020.

However, please note that real estate in Finland is considered a separate house or land, but the apartments are not in this category. And most of the apartments in the country are owned by housing companies. The most important thing to note here is that when you buy shares of these companies, you do not need permission from the Ministry. In this way, by buying shares of housing, very many foreigners buy apartments in Finland.

1. Find the right property.

You can find an apartment or house in Finland in the catalog of REALTING.

2. Check the documents and assess the condition of the object.

Before making a direct purchase, be sure to find out the following points from the management company (in most cases, it will be a housing company): Is it planned to repair it and how much will it cost? What is the state of the desired property? This is important because you, as the new owner, will have to cover all of the costs.

3. Open a checking account.

The most reliable way is to open an account at a local Finnish bank and transfer the amount you need. In order to do this, you will need a passport, bank statements from the country of residence, a certificate of employment, an income certificate, and other documents that may be requested from you by the bank.

Important. At the moment, Finnish banks do not open accounts for Russians. You can get out of the situation by transferring money from your foreign bank account directly to the seller or builder.

4. Book the selected object.

You can reserve the property by drawing up a preliminary agreement and paying a deposit.

When you and the seller sign a preliminary agreement, a notary must be present.

The deposit (käsiraha) is usually equal to 3–5% of the value of the object, but not always. The main condition is that the amount of the transaction cannot be less than €2,000 and more than 10% of the transaction value. If the transaction is cancelled due to the fault of the seller, the deposit will be returned to you in full; if the cancellation occurs because of you, the deposit will remain with the seller.

5. Conclude a sales contract.

The sales contract is typically written in Finnish by the bank or a realtor. Not only the seller and the buyer but also the realtor and the notary public are present at the signing.

6. Transfer the remainder of the transaction.

Before signing the contract of sale, the buyer must pay the full amount of the transaction minus the security deposit (if an installment payment is not provided).

7. Register the right of ownership.

When a property is sold in Finland, the purchaser must register it with the Finnish Land Registry Office. Apartments are not considered to be real property, so this rule will not apply to them. You can submit the registration application in person at the nearest office, send it by mail, or use the services of a courier.

As for apartments in housing societies, they are movable property. Therefore, immediately after the purchase, the new owner must declare the transaction and enter it in the share registry of the HMO.

Additional expenses when buying property in Finland

Among the associated costs of the purchase will be the following:

• State tax on the transfer of ownership

It is calculated on the basis of the price of the object specified in the notarial deed. If you buy an apartment (according to the law, it is a transfer of shares in a housing company), the tax rate is 2%. If you buy other real estate, the rate is 4%.

• Notary services

The presence of a notary in Finland is required. The approximate cost of his services is €200–500.

• Agent's fee

The agent's fee depends on the type of object and ranges from 3% to 4% of the cost of a detached house (including 24% VAT) or 5% of the cost of an apartment (including 24% VAT).

Important. Usually, it's the seller who pays the commission. However, if the buyer enters into a sponsorship agreement with a real estate agency to find a property, the commission is paid by the buyer.

• Real estate registration

To register a property, you need to contact the Office of Geodesy and Land Management.

The cost of registration is about 0.05% of the value of the property. Registration documents must be submitted within 6 months after the transaction (otherwise, you will have to pay a fine). Typically, the real estate registration process takes two to three months.

Dynamics of real estate purchase prices in Finnish cities

Our analyst Anastasia Fomina analyzed the Finnish housing market and found out how things are with sales volumes and average prices. 

— The number of transactions, both on the market of new buildings in Finland and on the secondary market, has significantly decreased: on the “secondary” market in 2023 in Helsinki and major cities, activity fell by almost 30%; in the rest of the country, — within 20%. Moreover, this decline began as early as 2022. 

The gradual increase in house prices in the “secondary,”  which began in 2020, stopped in the second quarter of 2023. 

In 2023, in Helsinki, the average price per square meter decreased by 12%, in large cities, — by 10%. The least tangible changes occurred in the rest of the regions, where the drop amounted to 3%.

By the way, the prices for real estate from the developer are much higher than the prices for secondary market properties — the difference is up to two times.

— An alternative to buying your own home is renting. In 2023, a record number of rental contracts were registered — more than 546 thousand. Since 2020, their number has increased by 23%. Average prices for rent per square meter of housing in 2023 are presented in the table below.

Thus, a one-room apartment of 40 square meters in Helsinki will cost €1040; in other regions, it will cost an average of €692.

For a one-bedroom apartment of 60 square meters in the capital, you will have to pay an average of €1174, while in the rest of the country, it is €896.

The average monthly rental price for a three-bedroom apartment of 80 square meters in Helsinki is €1459; in the rest of the country, it is €956.

In Helsinki, rental price growth is less significant compared to other cities — on average, within 1.5% per year. In other cities, the rental price increased by 2-3% per year.

The Finnish real estate market has been strongly influenced by measures to reduce inflation — rising interest rates have led to an increase in debt repayment obligations. At the same time, property owners (both developers and individual sellers) are in no hurry to reduce prices due to high expectations of profitability. It is likely that positive changes can be expected if the inflation target is achieved.