Investment Property in Finland - Residential & Commercial
- Jump Down to:
- Helsinki vs. The Rest of Finland
- Residential Property, Helsinki
- Residential Property Market Reports
- Residential Property Prices
- Residential Property: Investment Advice, Procurement & Management
- Advice for Landlords: Finnish Landlords Association
- Tax on Real Property and Rental Income
- Commercial Property: Market Reports, Brokerage, Management, and Advice
- Related Links
This page specifically concerns investing in property in Finland, as opposed to purchasing property as a residence. For additional information on purchasing property in Finland see Buying Property.
There are no obstacles to foreigners purchasing real estate in Finland; they are essentially on the same footing as Finns.
It should be noted that the state plays a prominent role in the Finnish real estate market. Of the approximately 800,000 rental homes in Finland slightly more than half have been constructed with state subsidies from the Housing Finance and Development Centre for Finland (ARA). The majority of ARA-subsidised dwellings are owned by municipalities and managed through municipal companies, local authorities, and limited-profit housing companies. They are only released from regulation after a period of between 10 and 45 years, so the 'free market' for investors is limited.
More information: www.ara.fi - En, Fi, Sw
Returns on Investment
My (very basic) understanding is that the best return on Finnish residential property investments is to be found from small apartments in central Helsinki. Additionally areas undergoing gentrification such as Kallio, a couple of kilometres north of the city centre, offer attractive investment prospects. Percentage-wise, in the current economic climate larger properties don't tend to make such significant gains and the market is not as active. However, don't take my word for it - always obtain professional advice.
The companies referred and linked to on this page are established Finnish firms with local expertise, actively offering investment property information and services in English. This page does not include companies claiming online to be Finnish property investment experts or specialists, who upon investigation were found to be based overseas with little or no expertise regarding Finland.
I expect all the agents listed at Finnish Real Estate Agents would also be able to provide sound investment advice, they just haven't promoted that service in English at their sites... yet.
Greater Helsinki, also known as the Helsinki Metropolitan Area, comprises the cities of Helsinki, Espoo, Vantaa and Kauniainen. It has a dominant position in Finland, accommodating quarter of the Finnish population and some 30% of all jobs. It delivers more than one-third of Finnish GDP and the proportion of private sector employment is significantly higher than in the rest of Finland. The global economy has a stronger impact on Helsinki than other regions. From the property investment perspective, central Helsinki is certainly the location of desire for most investors with the wherewithal, but it's also a lot more expensive than the rest of Finland as you will see below.
Investing Outside Helsinki
If you are interested in purchasing outside Helsinki, local real estate agents will have property data for their region stretching back over some years, and they should be able to provide good advice regarding the best investment prospects in terms of size, type and location of property. Language is rarely a barrier in Finland. In my limited experience with Finnish real estate agents (1 purchase, 2 sales) I have found them efficient, straightforward and ethical. This is in stark contrast to my experiences in Manhattan, which were high-pressure cutthroat affairs - and a lot more expensive.
Residential investment properties in central Helsinki can be difficult to find, particularly at the lower end of the market. The Financial Times published an article on 25th October, 2013 entitled Finland property: Helsinki seeks to attract overseas investors. It provides a good description of recent developments in Helsinki and the residential property market, though it does focus on the more affluent districts of central Helsinki and Espoo - so don't be put off by the prices and properties mentioned. Some salient facts relating to the property market from the article include:
- Only 39% of homes in Helsinki are owner-occupied or available for rental at market rates. Two-thirds of the land is in public hands and the city's real estate authorities play a prominent role
- Helsinki has a rapidly growing population of 600,000, expected to reach 650,000 by 2021
- Both the city's central residential neighbourhoods and parts of greater Helsinki contain attractive investment options
The Central Federation of Finnish Real Estate Agencies KVKL publishes brief industry reports in English. As of 4th June 2015 the latest online report is The year 2014 in the Finnish housing markets. It includes figures for:
- Changes in sale prices for houses and apartments
- Changes in rental prices for houses and apartments
- Turnover and percentage change of Finnish real estate transactions
- Past reports are also available
- KVKL: www.kvkl.fi > In English
According to preliminary data for July 2016 from the public authority for statistics, Statistics Finland, prices over the past 12 months of housing company dwellings in blocks of flats and terraced houses have:
- Risen by 1.8% in Greater Helsinki. The average price was €3,492 per m²
- Fallen by 1.8% elsewhere in Finland. The average price was €1,731 per m²
- These figures do not include new buildings.
Forenom Owner Services
Comprehensive services for housing investors in Finland, from investment advice to property purchase, rental and management.
Helsinki Office: Mannerheimintie 113, 00280 Helsinki Finland Map
Tel: +358 9 231 582 15
- Consultation on all matters related to buying, owning, letting and selling an investment property
- Identification of productive, targeted housing investments
- Advice on legal provisions, and preparation of documents
- Owner Services, from finding tenants and assistance preparing rental agreements through to full property management with secure rental income and tenant management
- www.forenomownerservices.com En, Fi
Full service property house, providing private and corporate property investors with analyses, evaluations, transaction and funding advice, and asset management. Offices in Helsinki, Tampere, Oulu, Turku, Hämeenlinna, Kuopio and Jyväskylä.
Helsinki Office: Mannerheiminaukio 1 A, PL 52, 00101 Helsinki Finland Map
Tel: +358 207 420 400
- Property management services
- Sales, purchase, funding and investment strategy advice and implementation
- Rental property strategies and services, for housing and commercial properties
- Property development analysis and advice
- Assessment and advisory services for individual properties through to full investment portfolios
- www.newsec.fi Fi
- tilat.newsec.fi: Commercial property search
If you intend to buy an investment apartment, the Finnish Landlords Association website has a wealth of information about investment strategies and returns, applicable law and documentation, taxation, and more. There is also a large Guides and Recommendations section.
www.vuokranantajat.fi Finnish only but works well at Google Translate
Tax on Real Property
- Transfer tax for real property is 4%. The buyer usually pays the tax
- Owners of real property pay real estate tax based on the property´s taxable value. Tax rates vary in different districts between 0.6% and 1.35% of tax value
- The rate for residential houses used for year-round living is between 0.32% and 0.75% of tax value; this does not include summer cottages
- Rental income falls into the category of capital income and is assessed at the rate of 30% (33% if over €30,000)
- Landlords can claim deductions. All expenses connected with the rental operation may be deducted from gross taxable rental income. Typical expenses include housing-company maintenance charges, annual repairs, and interest paid on the loan taken out to buy the apartment
The above information was obtained from the Finnish Tax Administration on 13th January 2015. Always check www.tax.fi for latest updates.
Founded in 1994, Newsec provides commercial property sales and acquisition advice, valuations and analyses, brokerage services, and asset and property management services. Newsec publishes Property Outlook Finland in English, with information about Finnish markets useful to investors as well as companies making decisions regarding location. Contents include:
- Finnish economic situation and outlook
- Finnish real estate markets and submarkets
- Real estate taxes and legislation
Newsec: www.newsec.fi Fi
Helsinki Office: Mannerheiminaukio 1 A, PL 52, 00101 Helsinki Finland Map
Tel: +358 207 420 400
Property Outlook Finland: www.newsec.fi/ajankohtaista/markkinaraportit/ Current and archived versions of the reports are available as PDFs for download.
Property Rental: See the Business Space page for commercial property rental.
KTI Property Information
KTI is an independent information business providing information and analysis of the Finnish real estate market. Their Benchmarking, Information and Research services support the planning, steering and monitoring of key processes of the property business. KTI's publications in English, KTI Market Review and The Finnish Property Market, are tailored towards international investors and offer detailed information regarding investment in Finnish real estate. They are available for purchase or online as PDFs. Contents include:
- The Finnish economy: overview and outlook
- Institutional aspects, structure and players in the Finnish property market
- Property sectors: investment performance, market structure and practices
- Regional outlook for property markets
KTI Property Information: www.kti.fi/en/
Swedish-originated Catella Property is a leading transactions advisor in the Finnish commercial property market, providing valuation, advisory, brokerage, and sales & letting services. Operating Finland-wide, Catella has offices in Helsinki, Jyväskylä, Lahti, Oulu, Tampere and Turku.
Catella publishes a report on the Finnish commercial property market each spring and autumn, Property Market Trends. It is available for order online in English and Finnish.
- Global Property Guide: Finland: Not a Finnish publication and only updated sporadically, but includes information about Finnish Rental Yields, Taxes & Costs, and more.