Velaton hinta vs myyntihinta: what a Finnish flat really costs

The listing says 60,000 euros. The tax office bills you as if you paid 80,000. Nobody lied; Finland simply prices a flat twice.

Velaton hinta, the debt free price, is the sale price plus the share of the housing company's loans allocated to the flat's shares. Transfer tax is 1.5 percent of that debt free figure, not of the sale price, according to Verohallinto, the Finnish Tax Administration, and the loan share keeps running as a monthly capital charge after the deal.

Why does a Finnish listing show two prices?

Section 2 of the government decree on information to be given when marketing homes, Valtioneuvoston asetus 130/2001, requires an advert for a flat to state the sale price, the myyntihinta, and the debt free price, the velaton hinta, whenever the two differ. They differ whenever the housing company, the asunto-osakeyhtiö, has loans and its articles allocate part of them to the shares being sold. That allocated part is the yhtiölainaosuus, the flat's loan share, and the buyer either pays it off when the articles allow or services it month by month through the capital charge, the pääomavastike.

The Finnish Competition and Consumer Authority, KKV, spells out the marketing rules in the Consumer Ombudsman's guideline on online marketing of new build homes. Marketing of flats sold with housing company financing must clearly show the debt free price and the risks attached to the loan terms, the marketer must ensure the sale price is not emphasised at the expense of the debt free price, and the marketing must state that shareholders are jointly responsible for the company loan, which can ultimately mean a payment obligation for the other shareholders.

How is transfer tax calculated on a flat?

Verohallinto's guidance for buyers of housing company shares is unambiguous: transfer tax is 1.5 percent of the price, including any other agreed consideration, and the unpaid part of any housing company loan. The rate applies to transfers from 12 October 2023. Verohallinto's own example has a buyer paying 60,000 euros for a flat with a 20,000 euro loan balance allocated to its shares. The debt free price is 80,000 euros, and the tax is 1,200 euros. Whether the loan share is paid off at signing or in monthly instalments makes no difference to the tax.

The return must be filed and the tax paid within two months of signing, and at signing itself when an estate agent handles the sale. Verohallinto also notes that the exemption for first time buyers ended on 1 January 2024, so every purchase of housing company shares now carries the 1.5 percent. Verohallinto's rate table puts real estate at 3 percent, and housing company shares and other securities at 1.5 percent.

Where do you verify the loan share?

The number comes from the housing manager's certificate, the isännöitsijäntodistus. Section 4, point 11 of government decree 365/2010 requires it to state the loan shares attached to the flat, itemised by loan where the shareholder may repay them, adjusted for any surplus or deficit in the capital charge at the time, and to mention loans the company has decided on but not yet drawn where the flat level share is still unknown. Section 6 adds the company side: every loan the company has drawn, by loan and purpose, whether a shareholder may repay their share, and the same for undrawn loans with an estimate of when they will be drawn.

Under chapter 7, section 27 of the Housing Companies Act, Asunto-osakeyhtiölaki (1599/2009), the certificate can be requested by the shareholder, by a pledgee holding the shares, and by an estate agent with a valid sales mandate. What else the certificate must reveal is covered in our guide to the isännöitsijäntodistus, and the undrawn loans line matters most when a pipe renovation is coming, as our putkiremontti guide explains.

What does the loan share cost each month?

The capital charge carries both interest and principal, as KKV's guideline describes it, so the monthly figure moves with the loan's rate. KKV requires marketing to present the risks tied to the loan terms, including the effect of rising interest rates on the capital charges, and to state the joint liability of shareholders. The certificate's itemisation by loan is where the rate, the remaining term and any decided but undrawn loans become visible.

Compare listings on the debt free price, then read the loan share behind it in the certificate. AiMYNDi reads the isännöitsijäntodistus and sets the loan share and the capital charge next to the two prices in the advert.