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Tax Advantages of Purchasing Property in Finland

Primary sources of information for this page: Finnish Tax Administration - Verohallinto & Finnish Ministry of Finance - Valtiovarainministeriö
This is a brief guide only, and does not constitute legal advice

First-time Homebuyers' Exemption From Transfer Tax

The purchase of a first home for permanent use as a residence is exempt from transfer tax under certain conditions. In brief these are:

Search "Buying your first home" at www.tax.fi for details of procedures, duties, conditions and restrictions.

Tax Deduction / Credit for Housing Loan Interest

Source: Finnish Tax Administration
If you intend to pursue these tax advantages, please visit the Finnish Tax Administration's Tax Credit on Home Loan Interest page for latest information.

If you have a home loan and pay interest on it, you are normally entitled to partial or full deductions. However, the rules on deductibility are different depending on how the dwelling is used.

Deductions on an owner-occupied home loan or a major improvement of such home
Your interest payments entitle you to partial deductions if you have borrowed money to buy a permanent home, or to pay for a major improvement. It does not matter whether the home is a single-family house or an apartment in a housing company.
In 2018 the deductible part of home-loan interest payments is 35% This will drop to 25% in 2019

The Finnish Tax Administration's Tax Credit on Home Loan Interest page includes:

Capital Gains on Property - Tax Exemption

In 2018 the capital income tax rate is 30% for income up to ‚ā¨30,000 and 34% for capital income exceeding that amount. However, the gain from the sale of a taxpayer’s home (i.e. the 'profit'; the difference between the purchase and sale price) is exempt from capital gains tax if the taxpayer has owned and lived in the home for a continuous period of at least two years.

Tax Credit for Renovations & Repairs

You can get an interest deduction if you borrow money for financing an improvement on your permanent home. This is a similar process as the deduction for home-loan interest payments.
For 2018, the deductible part of interest payments is 35%. This deduction is also available for repair and improvement of a second residence (ex. summer residence). This will drop to 25% in 2019
Source: Finnish Tax Administration
Please see www.tax.fi - Tax credit on home loan interest and
Forms for claiming tax credit: www.tax.fi - Tax credit for domestic costs (PDFs with instructions for filling them out.)

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