Real Estate Laws and Regulations in Finland

Published on May 7, 2026 and written by Cyril Jarnias

Navigating the Finnish Real Estate Market

Navigating the real estate market of a foreign country can be a complex undertaking, especially in Finland, where property laws and regulations have unique characteristics. Understanding these laws is crucial not only for international investors but also for those considering purchasing a long-term residence in this Nordic country.

Although the Finnish market is considered transparent and stable, it is nonetheless governed by a set of precise regulations that can influence the purchase and management of properties, particularly concerning property rights, taxation, and restrictions on secondary residences.

This article aims to decipher these essential laws to provide you with a solid and informed foundation, whether it’s a first investment or an expansion of your European real estate portfolio.

Property Acquisition by Foreigners: What You Need to Know

Information Box: Property Acquisition by Foreigners in Finland

General Principles

• Foreigners can buy real estate in Finland, but specific conditions apply depending on nationality.
• EU/EEA citizens generally have no particular restrictions.
• Non-EU and non-EEA citizens must obtain authorization from the Finnish Ministry of Defense, especially for purchases in certain sensitive areas (e.g., regions near strategic or military infrastructure).

Specific Restrictions and Conditions

• Since 2020, prior authorization is required for non-EU/EEA nationals wishing to acquire real estate, particularly in the archipelago or near sensitive state institutions.
• Exemptions include:
  • spouses of Finnish citizens
  • permanent residents of Finland

Recent Example of Regulatory Change

Date	Regulatory Measure	Impact
2020	Mandatory prior authorization for non-EU/EEA buyers	Strengthened control over transactions near strategic sites
2023	Project aimed at expanding control, particularly over financing of foreign acquisitions (increased security context with Russia)	Greater scrutiny of certain nationalities and types of investments

Concrete example: A recent attempt by a Russian citizen to acquire a large property near a military garrison illustrated the reinforced application of the rules.

Legal and Administrative Process

1. Property search (open to all)
2. Verification of the property’s legal status
3. For non-residents outside the EU/EEA:
   • Official application to the Ministry of Defense if necessary
4. Negotiation and signing of the preliminary contract
5. Payment of a deposit, typically around 3% of the agreed price
6. Finalization before a notary or authorized agent
7. Registration in the land register

Taxation Applicable to Foreign Buyers

Tax / Duty	Applied Rate	Main Observations
Transfer Tax	3% (real estate), 1.5% (company shares)	Payable upon purchase, calculated on the total price
Annual Property Tax	0.41% to 2%	Depends on the municipality
Tax on Rental Income	35%	For non-residents
Capital Gains Tax	30% up to €30,000, 34% above

Note: The purchase does not automatically confer a right to permanent residence or any particular immigration benefit.

Checklist – Key Points to Follow:

• Check your residency/nationality status before any steps.
• Plan for an official application if you are outside the EU/EEA.
• Scrupulously comply with all local tax obligations from the effective acquisition.
• Seek advice from a local professional to secure each administrative step.

For any foreign investor interested in the Finnish market, it is crucial to anticipate these steps and their potential regulatory evolution linked to the current international context.

Main Real Estate Laws and Regulations in Finland

Main Land Laws in Finland

• Land Use and Building Act
  Governs urban planning, land use, and building permits. It imposes strict obligations regarding safety, public health, and environmental respect.
  Municipalities play a central role in issuing permits, approving urban plans, and overseeing construction.
• Land Lease Act
  Organizes relationships between landowners and tenants for housing, agricultural, or commercial activities. It details termination conditions, usage rights, and potential compensation.
• Housing Companies Act
  Structures the rights and obligations of co-owners, the management of multi-unit buildings, and decision-making in general meetings. It specifies the role of the property manager and the allocation of expenses.

Construction and Renovation Regulations

• Any significant construction or renovation requires a permit, issued by the municipality.
• Mandatory compliance with safety standards (fire, accessibility, building stability).
• Environmental compliance obligation:
  
  • Construction waste management
  • Energy efficiency (insulation, eco-friendly materials)
  • Protection against natural risks (floods, landslides)
• Construction sites are subject to regular inspections by local authorities.

Tax Implications of Real Estate Transactions

Type of Property	Transfer Tax	Annual Property Tax (range)	Taxation of Rental Income
Real Estate	4%	0.6% to 4% depending on municipality	30% to 34% (after deductions)
Shares in Real Estate Companies	1.5%	0.41% to 2.0% (based on local decisions)	Same
First Purchase of Primary Residence	Possible exemption

– Transfer taxes are paid upon registration of the purchase.
– Property tax rates vary locally and are set annually by municipalities.

Rights and Obligations of Owners and Tenants

List of main rights and obligations:

Owners:

• Right to enjoy, lease, sell, or mortgage their property
• Obligation to maintain and comply with standards
• Payment of property taxes and co-ownership fees

Tenants:

• Right to peaceful enjoyment of the dwelling
• Obligation to pay rent and maintain the dwelling
• Compliance with internal rules and neighborly conduct

Implementation of Laws and Regulations

• Municipalities manage permits, urban planning, and inspections.
• The state oversees the harmonization of rules at the national level, particularly for tax aspects and transactions.
• Land registers ensure the legal security of transactions (registration of ownership, mortgages, leases).

Recent or Pending Reforms

• Modernization of land registration procedures (increased digitalization).
• Discussions on strengthening environmental standards in construction and renovation.
• Envisioned reforms concerning real estate taxation to promote residential mobility and the energy transition.

Note:

Certain restrictions apply for purchases by non-residents, especially for non-EU/EEA citizens (authorization from the Ministry of Defense in sensitive areas).
Assistance from a local professional is highly recommended to ensure compliance and legal security of transactions.

Understanding Local Real Estate Taxation

Real Estate Tax System in Finland

Tax or Duty	Rate (2024-2025)	Description and Concrete Examples
Property Tax	Variable by municipality (0.41 to 6%)	Levied annually, set locally. Generally around 1% for standard dwellings. Ex: apartment in Helsinki worth €300,000 ≈ €3,000 annual property tax.
Transfer Tax (varainsiirtovero)	1.5% (co-op shares) / 3% (real estate)	Paid upon purchase. Ex: single-family house of €400,000 → €12,000. Apartment of same value → €6,000.
Capital Gains Tax on Real Estate	30% up to €30,000 gain, then 34%	Applies upon resale with a gain. Ex: purchase at €250,000, resale at €300,000 = €50,000 gain → 30% tax, i.e., €15,000.
Tax on Rental Income	Progressive scale from 6% to 31.25%	Rental income is added to the taxpayer’s total income and taxed according to the general scale.

Property Tax

• Levied annually by the municipality.
• Variable rate: from 0.41% to 6% depending on the locality, generally around 1% for primary residences.
• Examples:
  • Apartment in Helsinki (€300,000) ≈ €3,000 property tax per year.
  • Rates are regularly revised by municipalities.

Taxation on Capital Gains from Real Estate

Upon resale of a property, the capital gain is taxed:

• 30% up to €30,000 in capital gains.
• 34% above that.

Certain exemptions exist, particularly for a primary residence if the property has been occupied for at least two consecutive years.

Tax Exemptions and Reductions

• Tax credit for renovation or energy improvement work (“household expense credit”).
• For 2025, the cap is lowered to €1,600 and the percentage of creditable expenses is reduced.
• Increased credit possible for replacing an oil heating system with a more ecological one.
• Tax deductions possible for certain energy renovation or ecological construction work (insulation, sustainable heating, etc.).
• Certain local grants or subsidies may also be available, depending on the municipality.

Specifics for Foreign Investors

• Non-residents are subject to the same property tax, transfer tax, and capital gains tax rates as residents.
• No major restrictions on real estate purchases for foreigners.
• Double taxation treaty between Finland and many European countries, including France: shared taxation to avoid double taxation on rental income and capital gains.
• Income from Finnish real estate companies held by non-residents is taxed as real estate income.
• Dividends paid by a Finnish real estate company to a foreign company (holding at least 5% of shares for 365 days) may be exempt from withholding tax; otherwise, a 15% withholding tax applies.

Influencing Factors for Purchase Decisions

• High variability of property tax rates depending on the municipality.
• Relatively high capital gains tax.
• Tax advantages for ecological renovations that can improve net profitability.
• Legal stability and absence of tax discrimination against foreign investors, but the need to properly anticipate cross-border taxation in case of non-residency.
• Real estate market volatility and regional price differences to consider when investing.

Visual Summary of Main Tax Credits and Exemptions:

Type of Work or Situation	Applicable Credit or Exemption (2025)
“Standard” renovation work	Up to €1,600 tax credit
Replacement of oil heating	Increased tax credit
Primary residence sold after 2 years	Capital gains exemption
Ecological expenses (insulation, energy)	Specific deductions and local grants

Property Owner Rights and Regulatory Developments

Fundamental Rights of Property Owners in Finland

Finnish property owners have essential rights, including:

• right to possession and inviolability of the home: they can decide who enters their home and enjoy a normal life on their property.
• right of maintenance: the owner is responsible for the condition and upkeep of the real estate.
• right of transfer or transmission: properties can be sold, inherited, or given away freely.

Added to this are specific obligations:

• comply with co-ownership rules (nighttime quiet hours, use of common areas).
• use the dwelling for its intended purpose (prohibition of commercial use for a property intended for residential use).

Recent Regulatory Developments After 2020

Since 2020, several legislative reforms have impacted property owner rights:

• Clarification of the customary right of access to nature (“everyman’s right”):
  • Citizens and visitors have the right to freely access private forests for walking or picking berries/mushrooms.
  • Owners cannot prohibit these traditional uses or demand compensation in most cases.

Concrete example:

A dispute between a landowner and a person picking berries was decided by the Supreme Court in favor of the collective right, confirming that this practice is not punishable.

Environmental and Urban Constraints Imposed by the Government

The government imposes several constraints that may limit owners’ prerogatives:

• Environmental restrictions:
  • Strict protection of certain natural habitats (wetlands, nature reserves), involving prohibitions or limitations on construction/maintenance/modification.
  • Obligation for the owner to comply with ecological standards during renovations.
• Urban constraints:
  • Local rules on urban density, maximum building height, or mixed use imposed by municipalities.
  • Local plans that may limit transformation or parcel division.

Strengthened Protection for Tenants

Protective provisions for tenants strongly influence the landlord’s rights. These include:

• Strict regulation of rent amounts and increases
• Mandatory legal procedures in case of eviction
• Right to remain in the premises under certain conditions

These strengthened measures aim to guarantee high residential security for all occupants, which can temporarily or even permanently restrict certain decisions normally belonging to the owner.

Country	Customary Right of Access to Nature	Tenant Protection	Environmental Constraints
Finland	Very extensive	Strong	High
Sweden	Similar	Strong	Significant
Norway	Similar	Strong	Significant
Denmark	More limited	Moderate	Less restrictive

In summary, Finland shares with its Nordic neighbors a strong tradition of collective access to private lands but is sometimes distinguished by particularly advanced protection for both the environment and its non-owner occupants.