Buying a House in Finland: Everything You Need To Know

Buying a house is a significant step, especially in a new country. For foreigners in Finland, the journey to homeownership comes with its unique set of challenges and considerations. This article aims to guide you through the process, offering clear, practical tips on buying a house in Finland.

Whether you’re looking for a cozy apartment in Helsinki, a lakeside cottage, or a spacious family home in the suburbs, understanding the Finnish real estate market and knowing what to expect can make all the difference. From legal and financial aspects to finding the right property and making it your own, we’ve got you covered. Let’s embark on this exciting journey together with the goal of turning your Finnish housing dreams into reality.

Understanding the Finnish Real Estate Market

The Finnish real estate market is known for its transparency and efficiency. Properties in Finland are generally well-maintained, and the country offers a high standard of living. Here, you’ll find a variety of housing options ranging from urban apartments to rural homes. The market is active year-round, but spring and autumn are particularly busy seasons for buying and selling properties.

Role of Real Estate Agents in Finland

Real estate agents play a crucial role in the Finnish property market. They provide valuable assistance in English for foreigners, making the buying process smoother. Agents can help find properties, arrange viewings, negotiate prices, and understand the legal paperwork. While their services come with a fee, their expertise and local knowledge are invaluable, especially for those new to the country.

Overview of Property Types Available for Purchase

In Finland, you’ll encounter a wide range of property types:

Apartments (Asunnot): These are common in cities and towns, ranging from studio flats to large, multi-bedroom units. They are typically part of a housing cooperative (asunto-osakeyhtiö), where you buy shares that entitle you to the exclusive use of an apartment.

Detached Houses (Omakotitalo): Ideal for those seeking privacy and space, detached houses offer the freedom to customize your living environment. They come with their own land, which the owner is responsible for maintaining.

Semi-detached and Terraced Houses (Paritalo and Rivitalo): These offer a middle ground between apartments and detached houses, often featuring personal outdoor spaces like gardens.

Summer Cottages (Mökki): Finland is famous for its summer cottages near lakes or in the forest. While some choose these as holiday homes, others live in them year-round.

Legal Considerations In Buying A House in Finland

Necessary Legal Documents for Buying a House

When buying a house in Finland, several important legal documents come into play. The most critical is the deed of sale (kauppakirja), which officially transfers ownership from the seller to the buyer. Buyers should also request a property information report (isännöitsijäntodistus) for apartments in housing companies, including details about the building’s financial and physical status and any upcoming renovations.

Obtaining a Finnish Personal Identity Code

For foreigners buying property in Finland, obtaining a Finnish personal identity code (henkilötunnus) is essential. This code is used in all transactions with public authorities and often with banks and other institutions. You can apply for this code at the Local Register Office (Maistraatti) or, in some cases, through the Finnish Immigration Service (Migri) if you’re applying for a residence permit.

Role of the National Land Survey of Finland

The National Land Survey of Finland (Maanmittauslaitos) plays a vital role in property transactions. It is responsible for maintaining the property and land registry, a public record of all property ownership in Finland. After the purchase, the new ownership must be registered with the National Land Survey to ensure legal recognition and protection of the new owner’s rights.

Financial Aspects

Overview of Costs Involved in Buying a House

Purchasing a house in Finland involves several costs beyond the purchase price. Buyers should budget for:

• Transfer tax: For existing properties, the transfer tax is 2% of the purchase price for apartments and 4% for detached houses. First-time homebuyers are exempt from this tax under certain conditions.
• Real estate agent fees: If you use an agent, their fees typically range from 2% to 4% of the purchase price, plus VAT. This varies by agency and service level.
• Legal fees: Hiring a lawyer is optional but recommended for complex transactions. Fees vary based on the services provided.
• Inspection fees: For a thorough assessment of the property’s condition, consider hiring a professional inspector. Costs depend on the property size and inspector rates.

Mortgage Options and Interest Rates for Foreigners

Foreigners can apply for mortgages in Finland, though requirements may include a Finnish personal identity code and proof of income. Banks generally finance up to 70%-80% of the purchase price, with interest rates varying based on the bank and your financial situation. It’s advisable to shop around for the best mortgage offer and consider fixed-rate or variable-rate options depending on your long-term plans.

Opening a Finnish Bank Account and Transferring Funds

To facilitate the buying process, opening a Finnish bank account is recommended. This requires a valid passport and Finnish personal identity code. International buyers should also account for potential currency exchange rates and transfer fees when moving funds to Finland. Online international transfer services may offer competitive rates and lower fees compared to traditional banks.

Related: Mortage Calculator in Finland: Everything You Need to Know (2024)

Finding a Property

Recommended Websites and Agencies for Property Listings

To start your search for the perfect property in Finland, explore listings on reputable real estate websites such as Oikotie.fi and Etuovi.com. These platforms offer comprehensive databases of available properties across the country, with options to filter by location, price, size, and property type.

Additionally, engaging with a real estate agency can provide personalized assistance. Agencies have access to listings that may not be publicly advertised and can offer valuable insights into local market trends.

Importance of Location

Choosing the right location is paramount. Consider factors like:

• Proximity to services: Look for convenient access to shops, healthcare, and other essential services.
• Public transport connections: Especially important in urban areas, good public transport links can significantly impact your daily life.
• Schools: For those with children, the quality and proximity of schools is a crucial consideration.
• Nature and recreational areas: Finland is known for its natural beauty. Access to parks, lakes, and forests can enhance your living experience.

Tips for Scheduling Viewings

Once you’ve identified potential properties, arrange viewings to assess them in person. Weekdays are often less busy than weekends, potentially giving you more time to explore each property. When viewing, pay attention to:

• The property’s condition: Look for signs of dampness, structural issues, or wear and tear that could indicate costly repairs.
• The layout and space: Ensure the property meets your space needs and consider the potential for future modifications.
• The surroundings: Assess noise levels, the neighborhood’s general condition, and any factors affecting your quality of life or the property’s resale value.

By thoroughly researching and carefully inspecting properties, you can make an informed decision on your future home in Finland, ensuring it meets your needs and preferences.

Making an Offer and Closing the Deal

Steps to Make an Offer on a House

After finding a property that meets your criteria, the next step is to make an offer. This process typically involves:

• Determining your offer price: Consider the asking price, the property’s condition, and market trends. It’s often advisable to start slightly lower than your maximum budget to allow room for negotiation.
• Submitting your offer: In Finland, offers are usually made in writing. Your real estate agent can assist with drafting the offer document, which should specify the price you’re willing to pay and any conditions you want to attach (such as a satisfactory home inspection).

The Importance of a Purchase Agreement

Once the seller accepts your offer, the next step is to draft a purchase agreement. This legally binding document outlines the terms of the sale, including the final sale price, closing date, and any contingencies (like obtaining financing or passing a property inspection). Both parties must sign the agreement for it to be valid. It’s crucial to review this document carefully, ideally with the help of a legal professional, to ensure your interests are protected.

Closing Process

The closing process in Finland is straightforward but involves several important steps:

• Paying the deposit: Once the purchase agreement is signed, you’ll need to pay a deposit, typically around 4-10% of the purchase price.
• Finalizing your mortgage: If you’re financing the purchase, finalize your mortgage with your bank. This includes signing the mortgage agreement and ensuring the bank is ready to disburse the funds on the closing date.
• Transferring ownership: The final step is the official transfer of ownership, which involves paying the remaining balance of the purchase price and signing the deed of sale. This document should then be registered with the National Land Survey of Finland to officially record you as the new owner.
• Receiving the keys: Once everything is finalized and all payments have been made, you’ll receive the keys to your new home.

Post-Purchase Considerations

Registering Your New Address

After purchasing your property, one of the first steps is to register your new address with the Local Register Office (Maistraatti). This is crucial for receiving mail, accessing local services, and ensuring your information is up-to-date in the Finnish Population Information System. Registration can typically be completed online or in person.

Utilities Setup

Setting up utilities is essential for a comfortable start in your new home. Key utilities include:

Electricity: Contact local electricity providers to start a new contract or transfer an existing one. Comparison websites can help you find the best rates.

Water: In most cases, water services will be set up automatically for detached houses or included in the housing association fees for apartments. However, it’s worth verifying this as part of your move-in process.

Internet and TV: Finland has a competitive market for internet and TV services. Shop around to find packages that suit your needs and budget. Installation appointments can often be booked online or over the phone.

Community Integration Tips

Integrating into your new community can enhance your living experience in Finland. Consider the following:

• Language courses: Although many Finns speak excellent English, learning Finnish or Swedish can help you integrate more deeply into society and understand local culture. Municipalities and private institutions offer language courses for all levels.
• Local clubs and social groups: Joining clubs or social groups based on your interests can be a great way to meet people and make friends. Whether it’s sports, arts, or other hobbies, a wide range of options are available throughout Finland.
• Neighborhood events: Participating in local events and activities is a fantastic way to get to know your neighbors and become part of the community. Keep an eye on community boards, social media groups, and local newspapers for upcoming events.

Additional Resources