Buying real estate in Finland as a US citizen?

We've created a guide to help you avoid pitfalls, save time, and make the best long-term investment possible.

How to buy and own real estate in Finland as a US citizen

Last updated on 

real estate Finland

Everything you need to know is included in our Finland Property Pack

Tervetuloa Suomeen!

Finland offers wilderness, saunas, and a strong sense of tranquility.

If you're an American citizen who craves Nordic serenity and outdoor activities, owning property in Finland is a peaceful choice.

However, making a property investment in Finland as a US citizen involves navigating new laws and regulations, which can be quite challenging.

No worries, we will give some indications in this blog post made by our country expert.

Our goal is to simplify this information for you, ensuring it's easy to understand. Should you have any further questions, please don't hesitate to get in touch with us.

Also, for a more detailed analysis, you can download our property pack for Finland, made by our country expert and reviewed by locals.

Can American people buy property in Finland?

Do you need to be a local or a permanent resident to buy a property in Finland?

In Finland, you don't have to be a citizen to buy and own property, which means Americans can certainly purchase real estate there.

However, non-EU citizens, including Americans, may need permission from the Ministry of Defence for certain types of property, especially if it's located in a border area. This isn't typically a complicated process, but it's an extra step to be aware of.

Permanent residency isn't a requirement for buying property in Finland. You can own property regardless of your residency status. This also means you don't need a specific visa or permit just for the purpose of buying property.

Buying property entirely online from the United States is feasible, but it's essential to be cautious.

The process involves several steps, such as negotiating the purchase, signing contracts, and handling legal matters, which can be done remotely. However, it's highly recommended to visit the property in person or have someone you trust do it for you.

Also, hiring a local real estate agent and a lawyer can ensure that all legal requirements are met and that the transaction goes smoothly.

Regarding financial matters, having a Finnish tax ID is not strictly necessary for the purchase itself, but it becomes relevant if you plan to rent out the property or sell it later, as you'll need to pay taxes in Finland.

Opening a local bank account isn't mandatory but can be very helpful for handling transactions and paying ongoing expenses related to the property.

Finally, apart from the standard documents required for real estate transactions (like identification and proof of funds), there aren't any special documents needed just for foreigners to start the process.

It's advisable, though, to ensure that all legal requirements are met, and this is where a local lawyer or a real estate agent can provide invaluable assistance.

Remember, each property purchase is unique, and specific requirements can vary based on the property's location and type.

What are the rights and requirements to buy real estate in Finland as a US citizen?

When you, as an American, look into buying property in Finland, your rights are largely on par with those of local citizens.

This means you're not restricted by your nationality in terms of what you can purchase or own. The same level of access applies to most foreigners, so you're not at a disadvantage or advantage compared to other non-EU nationals.

One specific area you need to be mindful of is purchasing property near sensitive areas like national borders or military zones. Here, you'd need to get permission from the Finnish Ministry of Defence.

This isn't a usual concern if you're looking at urban or typical residential areas but is more relevant for properties in strategically sensitive locations. It's a step to ensure national security and isn't unique to American buyers but applies to all non-EU nationals.

Regarding the types of properties or the number of properties you can own, there's no limit set by Finnish law. You can own multiple properties, be it residential or commercial, without any restrictions based on your nationality.

So, if you're thinking of buying a summer cottage in the Finnish countryside and an apartment in Helsinki, that's entirely possible.

In terms of minimum investment, Finland doesn't set a specific threshold that you must meet to buy property. This contrasts with some other countries that have minimum investment requirements for foreigners.

In Finland, your decision can be based purely on your budget and preferences, without worrying about meeting a government-imposed minimum.

Thinking of buying real estate in Finland?

Acquiring property in a different country is a complex task. Don't fall into common traps – grab our guide and make better decisions.

buying property foreigner Finland

What about buying land in Finland as an American?

Let’s focus a bit more on the land ownership system in Finland.

As a US citizen, you can buy land in Finland, both for residential and commercial purposes.

However, there are a few specific considerations to keep in mind.

Buying land along borders and in coastal areas is possible, but it's more regulated, as mentioned above. For border areas, especially near Russia, you need permission from the Finnish Ministry of Defence. This is to ensure national security and isn't usually a concern for most typical real estate transactions.

Coastal areas are generally more accessible, but they can have specific environmental regulations or restrictions to preserve the natural landscape.

Foreigners, including Americans, often buy land in popular areas like the Helsinki region, due to its economic and cultural significance, and in picturesque regions like Lapland or the Finnish archipelago, known for their natural beauty. These areas attract both residential and commercial investments.

Zoning and land use planning in Finland are quite structured and can vary significantly between regions. For instance, urban areas like Helsinki have strict zoning regulations focusing on urban development and infrastructure.

In contrast, rural areas might have more emphasis on environmental protection or agricultural use. It's crucial to understand the local zoning laws of the area where you're buying land, as they will dictate what you can and cannot do with your property.

Common land ownership issues in Finland include understanding and complying with local zoning laws, navigating the environmental regulations, especially in protected areas, and dealing with the bureaucratic process of obtaining necessary permissions for non-EU citizens in certain areas.

Buying property and becoming resident in Finland

In Finland, simply purchasing and owning property does not provide a direct path to permanent residency for an American or any other non-EU citizen.

Unlike some other countries that offer residency through real estate investment (often called "Golden Visa" programs), Finland doesn't have a specific scheme where investing in real estate grants you residency or citizenship.

To gain residency in Finland, you generally need to fulfill other criteria, such as having a job in Finland, being a student, or having family ties in the country.

The Finnish immigration process evaluates applications based on these types of grounds rather than on property investment.

Once you have a valid reason for residency (like employment), you can apply for a residence permit. This permit is usually granted for a specific period and can be extended.

After living in Finland for a continuous period under a residence permit (usually four years), you can apply for permanent residency. This status means you can reside in Finland indefinitely and have access to most of the rights and privileges of Finnish citizens, except for the right to vote in national elections.

Permanent residency can eventually lead to citizenship, but it requires you to fulfill additional requirements, such as demonstrating proficiency in either Finnish or Swedish and having a clean criminal record.

Citizenship is a separate process and usually requires you to have lived in Finland for at least five years with permanent residency status.

Make a profitable investment in Finland

Better information leads to better decisions. Save time and money. Download our guide.

buying property foreigner Finland

What is the process to buy property in Finland as an American?

How to get started? What are the different steps?

If you need a detailed and updated analysis of the process (and the mistakes to avoid), you can check our full guide about property buying in Finland.

When you're interested in buying property in Finland, the process is quite structured and involves several important steps.

Firstly, you'll begin by identifying the property you wish to purchase. This can be done through online listings, real estate agents, or personal visits to Finland.

After selecting a property, the next step is usually negotiating the price and terms with the seller.

The property title search is a crucial part of the process. In Finland, this is done to ensure that the property is free of any legal issues or outstanding debts.

This search is typically carried out by a legal professional or a real estate agent. They will check the land registry to confirm the property's legal status and ensure there are no encumbrances.

Once the title is clear, you'll proceed to the actual purchase. This involves signing a deed of sale, which is usually overseen by a legal professional.

The deed of sale outlines the terms of the transaction, including the price, payment schedule, and any conditions of the sale.

Regarding the transfer of funds, if you're buying property as an American, you'll likely need to transfer funds internationally. Finland doesn't have specific regulations for transferring funds for property purchases, but you should be aware of the regulations in both countries regarding large transactions.

It's advisable to work with a bank that has experience in international transfers to ensure the process goes smoothly.

The closing costs and fees in Finland can vary, but they generally include a transfer tax (which is a percentage of the purchase price), legal fees, and possible real estate agent fees.

As an American buyer, these costs are the same as for Finnish citizens.

Lastly, getting a mortgage as an American in Finland is possible. Banks in Finland do provide mortgages to non-residents, but the terms might be different from those offered to residents. You'll need to provide proof of income, a good credit history, and sometimes a higher down payment.

It's a good idea to consult with Finnish banks or mortgage brokers to understand the specific requirements and options available to you.

Risks and potential pitfalls related to property investment in Finland

When buying residential real estate in Finland, there are certain risks and considerations that, as an American, you might not typically encounter in the US.

One significant difference is in zoning regulations. Finland has stringent zoning laws, which can be more restrictive than those in many parts of the US. These regulations govern what can be built or altered on a property.

For example, if you're planning to buy a property and make significant renovations or build new structures, you'll need to be very aware of the local zoning laws. These laws can vary greatly from one municipality to another, and non-compliance can lead to substantial fines or legal issues.

Cultural and local customs in Finland might also influence your property purchase. For instance, in many parts of Finland, there is a strong emphasis on environmental conservation. This could impact your ability to modify a property or might impose additional responsibilities for environmental stewardship.

Understanding and respecting these cultural norms is crucial for a smooth transition into Finnish society.

Common pitfalls for US citizens often involve underestimating the complexities of the local real estate market, such as overlooking the need for permits for renovations or not fully understanding the tax implications of property ownership in Finland.

Additionally, there can be challenges in navigating the Finnish legal system and administrative processes due to language barriers and differences in legal practices.

In case of property-related disputes or conflicts with neighbors or authorities, the primary mechanism for resolution is the local Finnish legal system.

Finland has a well-established legal framework for dealing with property disputes, which includes local courts.

The process is generally straightforward but can be time-consuming. International arbitration is not commonly used for residential real estate disputes in Finland.

While local courts are the usual avenue for dispute resolution, it's advisable to seek amicable solutions with neighbors or local authorities before resorting to legal action. Mediation can be a less adversarial and more cost-effective approach.

Tax implications for US citizens buying property in in Finland

As an American citizen owning property in Finland, you need to be aware of several tax implications that can affect your financial planning.

Firstly, property taxes in Finland are a key consideration. These are levied annually by local municipalities and vary based on location and property type. The rate generally ranges from 0.41% to 2.00% of the property's assessed value.

This is a recurring expense you'll need to factor into your budget.

When it comes to selling your Finnish property, capital gains tax comes into play. In Finland, the capital gains tax on property sales is 30% for gains up to €30,000 and 34% for gains above that threshold.

However, if you've owned and used the property as your primary residence for at least two years, you might be exempt from this tax.

The tax treaty between the United States and Finland is also crucial. This treaty helps prevent double taxation on the same income in both countries.

It’s important to understand how this treaty applies to your property-related income to ensure compliance with tax laws in both countries.

Inheritance and estate planning are another important aspect.

If you own property in Finland, it becomes part of your estate. Finnish law may govern the inheritance of this property, and it could be subject to Finnish inheritance taxes.

These laws and taxes can be quite different from those in the U.S., so it’s vital to plan accordingly.

Don't lose money on your property in Finland

100% of people who have lost money in Finland have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

buying property foreigner Finland

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.