Buying property in Finland starts by searching for a suitable property for your needs. Most real estate agencies have properties online for sale and their sites are a good starting point to view and compare properties. Most of the sales are done by using services of real estate agents. Buying property in Finland is straightforward, but there is some regulation involved, that needs to be considered and followed.
Because of historical reasons, selling of a property more formal procedures compared to other commodity sales, as the value of the property is often quite high, and properties have significant impact in the society and wellbeing of individuals. There are basically three property acquisition types in Finland. These are real property, an unseparated parcel or a designated share of a property. Unseparated parcel is an area of the existing property, that will be separated in a cadastral survey. Designed share is a fraction of the property, meaning that a property is owned by several entities, for instance three owners who each own 1/3 of the property.
A real property in Finland consists of the area of the property, privileges to jointly owned areas and the property’s encumbrance, such as a road, for instance. A single property may include both land and water. A real property may consist of several separate areas, or lots. Each property is identified and has an individual identification number. A property and the housing unit located therein comprise fixed property. In other words, a building alone is not legally regarded as fixed property.
Property Transaction Process in Finland
After property has been found, there are some things to keep in mind during the purchase process. Sometimes, there is a deposit that needs to be paid before the deal. This deposit is part of the sales price. In addition, when buying a property, a public purchase witness is needed. If a property conveyance has not been witnessed, it is not valid, and the buyer cannot be granted title to the property. Only a public purchase witness can witness a property conveyance. Public purchase witness will charge a small fee of their service. Public purchase witnesses can be found using public purchase witness online search or a suitable witness is selected by the sales agents.
Before buying, always check the certificate of title and the certificate of mortgages and encumbrances of the property. From the certificates you can see who really owns the property and if the property has some other unwanted characteristics, that might not be favourable to the buyer. Certificates are usually provided by the seller or real estate agent, or they can be ordered from the National Land Survey. The certificates are subject to a small charge. Certificates of title and certificates of mortgages and encumbrances need to be as new as possible to guarantee they are up to date. If a purchaser is from outside of the EU or EEA, you may need permission from the Ministry of Defence to acquire property.
If it is a company buying the property, then a person who is signing needs to prove that he/she is eligible to make such a decision and transaction. This can be done by submitting a copy of board meeting minutes or general meeting minutes of the buyer’s organization. Buying can be done remotely, then a power of attorney will be used, usually a signed copy of Power of Attorney is enough. You also need to review and sign a bill of sales or sales agreement. A bill of sales is carefully reviewed by a public purchase witness as well and a signed agreement is send to National Land Survey of Finland (Maanmittauslaitos) after signature. The amount of purchase is usually paid at the signing ceremony, but this can be agreed. However, the sale is valid only after the sales price is paid.
Applying for title registration of a property
Acquired property needs to be registered, otherwise you will not get property on your name. Registration of a property is done at National Land Survey of Finland (Maanmittauslaitos). It takes usually about three months to register, as the municipality or state may have the right of pre-emption in a property sale. The right of pre-emption is valid for three months following the date of sale. Ownership of the property needs to be registered within 6 months from the sale. You must also conclude the purchase by filing a transfer tax report and pay taxes. Tax is 4% of the sales price.
If property need to be parcelled, the unseparated parcel is converted into a new property in a parcelling procedure, which is initiated automatically by the National Land Survey of Finland after the acquisition. A parcelling procedure is part of a cadastral survey, and it is needed when you want to establish a new property from existing one, but it can also be started when you want to define the borders of a property or change the rights related to a property. The owner of the property is invited to cadastral survey, but it is not mandatory to participate. It is good to note that cadastral surveys are usually not conducted during wintertime. National Land Survey of Finland will charge the parcelling costs from the new owner. These costs are fixed and can be reviewed online beforehand. The cost of the parcelling depends on the size of the property.
If you need help in acquiring real property in Finland, please ask us for assistance.