Buying a new apartment in Finland

Buying a new apartment in Finland is a clear process, but there are a few terms and stages that are good to understand before you make a decision. This guide explains what happens when you reserve or buy a new build home during advance marketing or construction, what costs to consider, and what to expect before and after moving in. 

In this guide: 

1. Advance marketing and reserving a home 
2. Sales phase and the RS system 
3. Signing the purchase agreement 
4. Purchase price, debt-free price and housing company loan 
5. Plot ownership and transfer tax 
6. Interior choices and alteration work 
7. Construction phase and buyers' meeting 
8. Move-in inspection and moving day 
9. Transfer of administration 
10. Annual inspection
     

Advance marketing and reserving a home 

Even before construction work begins, homes sold by the construction company may enter advance marketing, which means that customers can reserve them. At this stage, you can choose the home that best suits you and may be able to make changes to colours, surface materials, and fixed furniture. 

Once you have paid the 2 000-euro reservation fee and signed the reservation agreement, your reservation remains valid until the sales phase, when the official housing transaction takes place. If you decide to cancel your reservation before the sales phase, the reservation fee will be returned to you in full. 

You can reserve a home easily by contacting SRV housing sales by phone or message. 

Sales phase and the RS system 

An RS property is a new build development where apartments are sold during the construction phase. The development is then part of the RS system, which means that the safeguards and guarantees required by the Housing Transactions Act have been arranged for the benefit of buyers and the housing company. The RS system is designed to protect buyers in housing transactions during construction. 

Under the RS system, the seller, meaning the founding contractor, must deposit the security documents with a bank or the Finnish Licensing and Supervisory Authority. These documents include, for example, the financial plan, building permit, drawings, building specification and information on guarantees. In addition, purchase agreements during the construction phase must be made in writing, and the seller must arrange the guarantees required by the Housing Transactions Act for the benefit of buyers and the housing company. 

Buyers also have the right, if they wish, to appoint a construction work observer and an auditor at the shareholders’ meeting required by the Housing Transactions Act. These representatives act on behalf of the buyers during the construction phase. The meeting must be held once at least one quarter of the homes have been sold. 

Signing the purchase agreement 

The housing transaction takes place only when the development moves from advance marketing to the sales phase. Before signing the purchase agreement, you will receive all related documents for review. These may include the payment schedule, financial plan, articles of association, building specification and floor plans. The documents show what you are buying, when each payment is due and what costs are associated with the housing company. 

You should also check the sales price, debt-free price, any housing company loan share, estimated charges and the form of plot ownership. If anything is unclear, ask SRV’s housing sales. Buying a new home is a major decision, and we are happy to help. 

Purchase price, debt-free price and housing company loan 

The sales price of the apartment is the amount you pay to the seller. The debt-free price is the total price of the home, including the apartment-specific share of the housing company loan. The form of plot ownership and transfer tax also affect the costs of buying and living in the home. 

You pay the sales price to the seller of the housing shares, meaning the founding contractor. Typically, around 15 per cent of the sales price is paid when the purchase agreement is signed, and the remaining instalments are paid as construction progresses. 

The debt-free price is the total price payable for the apartment. It consists of the sales price and the apartment-specific share of the housing company loan. 

You can usually pay off your housing company loan share in full before the apartment is completed. Later, you may be able to pay it off partly or fully at the times specified in the loan agreement and by the housing company’s board, usually once or twice a year. 

If you do not pay off your apartment-specific housing company loan share, you repay it to the housing company each month through a capital charge, which reduces your share of the housing company loan. 

In new build homes, it is common for only interest to be paid on the housing company loan during the first year. After that, loan repayments are added, which increases the capital charge. Because housing company loan repayments are made every six months, the amount must be collected in advance. If you sell the apartment, the remaining housing company loan and related capital charges are transferred to the new owner. 

Plot ownership and transfer tax 

The form of plot ownership affects the price of the apartment and monthly housing costs. 

If the housing company has been built on a plot owned by the housing company, the plot is included in the purchase price of the apartment. In this case, you do not pay a separate plot rent charge. 

If the housing company is located on an optional leasehold plot, you pay a separate plot rent charge. The plot rent charge is rent, so paying it does not reduce the apartment-specific plot redemption price. If you redeem your share of the plot, the plot rent charge will no longer be collected. 

If the leased plot cannot be redeemed, for example in the case of a city-owned leased plot, a separate plot rent charge is usually not collected. In this case, the cost of the leased plot is included in the maintenance charge. 

When you buy housing shares, you pay transfer tax of 1.5 per cent of the debt-free purchase price. If you redeem a plot share, you pay transfer tax according to the transfer tax rate for real estate, which is 3 per cent. 

Interior choices and alteration work 

In SRV homes, you can make the apartment feel like your own. In addition to the three interior design themes included in the price of the home, SRV offers a wider selection of choices at an additional cost. When you make your choices early, you can create a home that works for you and reflects your preferences before moving day. 

For example, you can choose the kitchen cabinet doors, request a preferred wall colour, or select different bathroom tiles. The available alteration options vary slightly between SRV’s residential developments, so please check the details in each housing company’s brochures or ask the customer service representative for the development. 

To ensure that your home is safe and compliant with regulations, not all changes can be made. Unfortunately, SRV cannot carry out changes related to the building permit, the building facade, load-bearing structures or HVAC, electrical and plumbing plans. 

Construction phase and buyers' meeting 

Once one quarter of the homes in the development have been sold, SRV will convene a buyers’ meeting. 

At the meeting, buyers have the right to appoint a construction work observer to monitor that the construction is carried out in accordance with the agreement. The observer must be independent of the seller and contractor and have the professional competence required for the task. A separate auditor may also be appointed at the meeting. The costs of these appointments are included in the housing company’s budget and are shared by all shareholders. 

At the meeting, buyers can also ask questions about the apartment, the housing company and the construction work. 

Move-in inspection and moving day 

You will have the opportunity to visit your new home and carry out a move-in inspection about one month before moving day. SRV aims to correct any defects identified during the inspection before you move in. 

About five weeks before moving day, you will receive a move-in letter confirming the confirmed moving date. The letter will also include details such as the selected property manager, specified housing company charges and user fees, the time and place for handover of keys, and the time for handover of share certificates. 

On moving day, representatives of SRV and the housing company’s property management office will be there to help. Possession and ownership of the apartment are transferred to the buyer once the final installments of the purchase price, as well as any agreed and completed alteration work, have been paid on moving day. 

Transfer of administration 

Within approximately three months of moving in, SRV will invite the shareholders to a general meeting, where the housing company’s administration is transferred to the board to be elected and the construction phase comes to an end. At the meeting, interim financial statements and the auditor’s report are presented, and an account is given of the implementation of the financial plan and the construction work. After the meeting, the new board may hold its organising meeting and elect a chair. 

The one-year inspection 

SRV will convene the annual inspection meeting 12 to 15 months after the housing company has been completed. In connection with the annual inspection, you will receive a form for noting any defects found in your apartment or in the common areas. Repair needs identified at the meeting are addressed after the annual inspection. In addition to the RS guarantees, buyers are protected by construction defect insurance, which is valid for 10 years from completion of the development. 

Read more about buying a new apartment in the The Confederation of Finnish Construction Industries' guide.