Can you buy a Home in Finland from abroad?

Are you planning to move to Finland and wondering whether you can buy a home before you arrive? Or perhaps you already live abroad and would like to purchase an apartment in Finland as an investment or a future home?

The short answer is yes: you can buy a home in Finland from abroad. However, in practice, it can be much more complicated than you might expect.

From my experience helping internationals buy their first home in Finland, the biggest obstacles are often not finding a suitable apartment or agreeing on a price. They are opening a Finnish bank account, obtaining financing and arranging the payment of the purchase price.

In this article, I explain what you should consider before buying a home in Finland from abroad and how to prepare for the process.

1. Can foreigners buy a home in Finland without living here?

Yes. In general, you do not need to live in Finland to buy an apartment or a home in a housing company,

However, there is an important difference between being legally allowed to buy a property and being able to complete the transaction in practice.

For example, you might find an apartment you like, agree on a price with the seller and have enough money to pay for it. Yet you could still run into difficulties when trying to arrange the payment or complete the transaction.

This is particularly relevant if you live outside Finland, do not have a Finnish personal identity code and do not have a Finnish bank account.

So, while you can buy a home in Finland from abroad, it is important to understand the practical challenges before you start looking for properties.

2. Can you open a Finnish bank account if you don’t live in Finland?

This is often one of the first challenges.

Based on my experience, opening a Finnish bank account can be very difficult if you do not live in Finland and do not have a Finnish personal identity code.

The exact requirements depend on the bank and your individual circumstances. Banks must identify their customers and comply with anti-money-laundering regulations. If you live abroad, have no existing relationship with a Finnish bank and want to transfer a substantial amount of money to Finland, the bank may need to carry out additional checks.

Having a passport and enough money in your foreign bank account does not automatically mean that a Finnish bank will open an account for you.

My advice is to contact Finnish banks before you start looking for a home. Explain your situation clearly and ask what documents they would require to open an account.

Do not assume that you can simply open an account online shortly before signing the deed of sale.

3. Can you get a mortgage in Finland if you earn money abroad?

Yes, it is possible in principle to obtain a mortgage from a Finnish bank even if your salary comes from abroad.

For example, you might already live in Finland but work remotely for a foreign company. Or you might be employed by a company abroad and commute between countries.

However, earning a salary does not automatically mean that a Finnish bank will grant you a mortgage.

The bank will assess your overall financial situation and the risks associated with your application. Among other things, it may consider:

• Your employment situation and the stability of your income.

• The country where your employer is based and where your salary is paid.

• The currency in which you receive your income.

• Your existing loans and other financial commitments.

• Your savings and the amount of your down payment.

• The property you intend to buy and the collateral available to secure the loan.

The bank may also need additional documents to verify your income, employment and financial commitments.

If you live in Finland and earn money abroad, getting a mortgage is possible in principle. The outcome depends on your individual circumstances and the bank’s lending criteria.

If you have not yet moved to Finland, the situation may be more complicated. In my experience, it can be difficult to obtain financing before you have established a banking relationship here and the bank has a clear understanding of your financial situation.

This does not mean that obtaining a mortgage before moving is impossible. However, you should clarify your options with Finnish banks before making plans to buy a property.

If you are planning to finance your purchase with a mortgage, I recommend reading my article How to Get the Right Home Loan in Finland.

4. Can you buy a home in Finland if you have enough cash?

You might think that having enough money to pay the entire purchase price solves the problem.

Unfortunately, it does not necessarily make the process straightforward.

Even if you do not need a mortgage, you still need to arrange the payment of the purchase price and complete the transaction.

In Finland, the bank often plays an important role in coordinating the payment and the signing of the deed of sale. The exact arrangements depend on the transaction and the parties involved.

If you do not have a Finnish bank account, you may need to find an alternative arrangement that all relevant parties accept.

The challenge is that banks, real estate agents and lawyers must comply with anti-money-laundering requirements. They need to understand who is paying the money, where it comes from and who is involved in the transaction.

From my experience, banks and other parties are not necessarily keen to arrange an escrow account for a substantial payment coming from an unfamiliar person abroad.

This does not mean that an international payment is prohibited or that a purchase is impossible. It means that you should not assume that the seller’s agent or a lawyer will automatically arrange everything for you.

Before signing anything, establish how the payment can be made and who will handle it.

5. Can your parents buy part of your future home in Finland?

This is a particularly interesting situation that I have encountered in my work.

Imagine that you are planning to move to Finland and want to buy an apartment. Your parents live in the United States and would like to help you by purchasing a share of the apartment themselves.

Perhaps they want to contribute financially, become co-owners or help you secure a mortgage.

At first glance, this sounds relatively straightforward. However, there are several practical and tax-related questions to resolve.

How will your parents pay for their share?

If your parents do not have Finnish bank accounts, arranging their part of the purchase price may be difficult.

The bank handling the transaction will need to know who is making the payment and verify the relevant details. If your parents transfer money directly from their US bank accounts, the parties involved must agree in advance on how the payment will be handled.

Do not assume that the bank can simply receive their money and include it in the payment arrangements for the purchase.

Will the bank accept all owners?

If you need a mortgage, the bank will normally use the property as collateral for the loan.

If several people own the apartment, the bank needs to establish the ownership structure and arrange the necessary collateral documents and signatures.

This can become more complicated if some owners live abroad, have no Finnish personal identity code or have no existing relationship with the bank.

The bank must also be comfortable with the proposed ownership and collateral arrangements.

You should therefore discuss the proposed structure with the bank before deciding how to divide the ownership.

Could gift tax become an issue?

This is another important point to consider before your parents buy a share of your future home.

Imagine that your parents own a substantial part of the apartment but allow you to live there without paying rent or other compensation.

Depending on the ownership structure and the actual arrangements, the benefit you receive from being able to use their share of the property for free could have gift tax implications in Finland.

In other words, owning part of a home and allowing your child to live there rent-free is not necessarily a tax-free arrangement.

The tax treatment depends on the specific circumstances, so you should not assume that gift tax will automatically apply, nor that the arrangement is automatically tax-free simply because the owners are family members.

Before deciding on the ownership structure, check the situation with the Finnish Tax Administration (Vero) or a tax adviser familiar with your circumstances.

You can find official information on gift tax on the Finnish Tax Administration’s website. If you wish to avoid gift tax this blog post will help: How to avoid gift tax in Finland.

Is co-ownership the best solution?

Before involving your parents as co-owners, consider whether this arrangement is actually necessary.

There may be other ways for them to support your purchase, depending on your financial situation and the bank’s requirements.

For example, a gift or a loan from your parents could be worth discussing with the bank. Each option has different legal, financial and tax implications, particularly when money crosses international borders.

Do not decide on the ownership structure before checking what the bank will accept and understanding the tax consequences.

6. What should you do before buying a home in Finland from abroad?

If you are serious about buying a home before moving to Finland, I would follow these steps.

Step 1: Contact Finnish banks.

Explain where you live, where your income comes from, whether you have a Finnish personal identity code and whether you already have a Finnish bank account.

Ask whether they can open an account for you and whether they would consider financing your purchase.

Step 2: Clarify how you will pay.

If you are buying without a mortgage, ask the bank handling the transaction how the purchase price can be transferred and what documentation it requires.

If another person will contribute to the purchase, explain this from the beginning.

Step 3: Establish your budget.

Remember that the purchase price is not the only cost. Depending on the property, you may also have transfer tax, housing company charges, renovation costs and other expenses.

If you buy an apartment in a Finnish housing company, make sure you understand the company’s financial situation, existing debt and upcoming renovations.

Step 4: Get the ownership structure right.

If your parents, partner or another person will own part of the property, agree on the structure with the bank before making an offer.

Make sure everyone understands their rights, responsibilities and obligations. Also, consider any potential tax implications before completing the purchase.

Step 5: Do your homework before making an offer.

Once you find a suitable apartment, remember that making an offer in Finland is a serious commitment. An accepted offer can be binding, and withdrawing without a valid basis may result in a penalty.

Read my guide Read This Before Making an Offer for a Home in Finland before taking this step.

My recommendation: plan your purchase before you move

Buying a home in Finland from abroad is possible in principle, but it can be difficult to arrange in practice, particularly if you have no Finnish personal identity code, no Finnish bank account and no established relationship with a Finnish bank.

If you plan to move to Finland soon, it may be worth waiting until you have arrived, established your banking arrangements and clarified your financing options.

If you want to buy before moving, start by speaking to banks and establishing how the transaction could be completed. Do this before you start negotiating with sellers.

And if you are planning to buy a home in Finland but are unfamiliar with the local market, remember that there is more to consider than just the purchase price. Understanding the housing company, the financing and the terms of the transaction can make a significant difference