There are around 800,000 rented flats in Finland, of which about half have been built using finance from the national ARAVA loan scheme or interest subsidy loans. These flats are owned by local authorities or non-profit-making organisations.
Tenants are eligible for State-subsidised rented accommodation according to their need, their income and their financial circumstances. Rents are set to cover the costs of providing the housing, including capital construction costs and maintenance expenses.
Half of the rented apartments in Finland are privately owned, and have been built without State subsidies. Rents in the private sector are determined by market forces.
Controls over the tenancy of flats built under the ARAVA and interest subsidy loan schemes ensure that such flats remain in the rental sector in the long term at reasonable rents, so that the benefits of subsidies are enjoyed by tenants.
Separate legislation controls private rental agreements, with conditions related to reasonable rent levels and how rent increases may be imposed.
Just under half of all owner-occupied housing is owned and managed by housing companies. The right to reside in a particular house or flat owned and managed by a housing company is tied to the ownership of shares in the housing company. In Finnish legal terms, the transfer of a home owned by a housing company is seen as the sale of shares in the housing company, rather than a real estate transaction.
Residents pay a monthly fee to the housing company to cover maintenance costs, heating costs and the water supply. Housing companies’ policies are defined by residents at open meetings. The construction of such housing is usually financed on the open market.
Slightly over half of all owner-occupied housing are detached houses. Most of these are in private ownership, but some are owned by a housing company.
The opportunity for part-ownership brings home ownership within the reach of many more people. Residents of State-subsidised part-ownership housing first purchase a 15% share in their accommodation, and then have right of residency under a fixed-period tenancy, during which they pay rent to the majority owner. At the end of this tenancy, residents may buy the whole flat or house.
Eligibility for part-ownership of housing produced through interest subsidy schemes is based on social and financial factors. After residents have completely purchased such housing, controls over factors such as residence eligibility and sale price no longer apply. Conditions for market-financed part-ownership schemes run by housing companies differ from those applied to State-subsidised housing.
Just over 1% of Finnish household lives in right-of-occupancy housing.
Right-of-occupancy agreements give residents certain rights similar to ownership over their homes. Residents pay a right-of-occupancy fee amounting to 15% of the purchase price of the accommodation, as well as a monthly occupancy fee.
Right-of-occupancy schemes do not ultimately entitle residents to purchase their homes, although the owners of the housing may not unilaterally terminate the right-of-occupancy agreement.
Eligibility for right-of-occupancy housing produced through State-subsidised schemes is based on factors such as the applicant’s need and financial circumstances. Such conditions do not apply in market-financed right-of-occupancy housing schemes.
For more information:
Anna Saarinen, Senior Officer for Legal Affairs, Housing and Building Department, Ministry of the Environment
Tel. +358 40 173 3289