The roles of your estate agent and bank in Finland are a lot greater in the process of buying property than in other countries. They will take care of the majority of the legalities involved, meaning it is not necessary to hire a lawyer unless you specifically want to.
Both the buyer and the seller of the property play a very small role in the purchasing process. Once the buyer is satisfied that the property meets their standards, they need only to agree on a sale price with the seller. Almost all other technicalities of the transaction are handled by the estate agents and the bank.
When the buyer and seller have made an agreement they must notarise the deed of sale in the presence of a public notary. The agreement should be in writing, signed by both parties and contain the following information:
Both the buyer and the seller will also need to show some form of personal identification to the notary, otherwise the agreement will be deemed null and void.
The buyer must pay the transfer tax before becoming the registered owner of the property. This is 4% of the value of the property and can be paid at any local bank, directly at the Tax Authorities or online. The bank or public notary will be able to advise you if you need help with this process.
Only when the transfer tax has been paid can the buyer apply to register the property at the Land Registry. This must be done at the district court in the region in which the property is located within 6 months of purchase. There is a small registration fee to be paid. You should submit the following documents with your application:
The registration process generally takes at least a week to complete, and sometimes slightly longer.
Once the documents are all in place, the buyer and the seller are simply required to sign the papers, agree on a move-in date and the deal is done! Although the documents will be produced in Finnish, there is almost always somebody on hand at either the estate agent or at the bank who can speak English well enough to be able to translate the documents for you.
All in all, it takes approximately two weeks to complete all the administrative procedures when buying property in Finland.
You are of course free to hire a lawyer if you wish. Just because estate agents and the bank can look after the legal side of the process does not make it a bad decision to hire a lawyer.
The role of the lawyer would be to correspond with the estate agent throughout the entire process. They will check through the sale agreement, read survey reports, assist with contractual issues and run checks with the local council where necessary.
Of course, you would have to pay extra fees for the lawyer’s services, as well as estate agent fees.
The real estate tax covers land tax, street charges, tax on income from housing and presumptive income taxation.
Each municipality is responsible for how much tax must be paid. Rates are based on each individual estate, generally, between 0.93 and 2.0%, or for permanent residential buildings the rate is roughly between 0.41 and 1.0%.
Both the property itself and the land it occupies are subject to real estate tax. Real estate tax is deducted from income tax if the property has been used to earn income.