Buying and registering property in Finland

In 2000, Finland lifted restrictions on all property acquisitions by foreign citizens excluding farmland and it generally only takes two weeks to finalize a transaction.

How it works in Finland:

1. Find a property in Finland. A local real estate agency offers properties that match your preferences as a buyer. The city, district and your budget are the main things to  take into account. Once you have found one or more options that interest you, the agency will arrange viewings. Don’t hesitate to ask your real estate agent any questions about the property, payment procedures or potential discounts.

When you find what you are looking for, just send your agent the offer along with a copy of your ID.

2. Open a bank account. You will need to open a bank account in Finland in order to proceed with the transaction. To do so, you will need a valid passport and permanent or temporary residence permit for the country. Foreign buyers can also apply for a mortgage in Finland.

3. Do the due diligence. You or your agent will need to check with the local authorities about the right to use the property, the land under it and the buildings in the surrounding area. Before the preliminary sales contract is made, you will have to have the property inspected for hidden defects for which the seller is liable.

4. Sign the preliminary sales contract and pay the deposit. The preliminary sales contract (ostotarjous) contains a description of the property, the transaction value, payment schedule and procedure as well as the date for the transfer of property rights, interest on late payments and down payment terms. A deposit amounting to 4% of the transaction value (usually at least €2,000–5,000) must be paid. This is non-refundable if you change your mind and decide not to buy the property and it cannot be used to buy a different property. However, if the seller cancels the transaction, they will refund your deposit.

5. Make your final payment. Now it’s time to remit the final sum to the seller’s account. Be ready, it is not unusual to be requested to lodge a statement concerning the origin of your funds (Selvitys varojen alkuperä) with the Bank of Finland.

6. Sign the final sales contract. Once you and the seller have signed the final sales contract (kauppakirja) before a notary in the agency representing the seller, the property right will be transferred to you.

The seller will also provide you with a copy of the sales contract and the following documentation:

• certificate of registration of the property right (lainhuutotodistus);
• excerpts from the land registry;
• pledge certificate (rasitustodistus);
• map from the land registry;
• copy of the urban development plan;
• construction permit;
• certificate of construction completed by engineering survey;
• construction drawings.

7. Pay taxes and charges. A district court records the transfer of property rights on which you must pay a transfer tax (varainsiirtovero) worth 4% of the house value or 2% of the apartment value. The seller pays the real estate agent's fee (3–5% of the property purchase price) and VAT amounting to 24% of the agreed commission fee. Notary fees are range from €80 to €100.

8. Register your property. File your application with local authorities within six months of concluding the sales contract. Otherwise a progressive penalty amounting to 20–100% of the purchase price will be charged. Once you have done this, it will take a month to receive the property deed.