The seller and buyer notarize the deed of sale with an attesting notary or prepare the agreement through E-Conveyancing
Agency: Attesting notary / purchasing witness or online through e-conveyance system
The seller or the buyer can prepare the sale agreement, no involvement of a lawyer or real estate agent is required by law. In general, the seller presents an extract from the Land Registry and extracts from the Title and Mortgage Registries demonstrating ownership and any registered encumbrances, but these are not formally required.
The agreement must be in writing and contain at a minimum the following information (according to the Code of Real Estate 540/1995, as amended): name of the seller and buyer, the object of purchase (including real estate number), the purchase price or equivalent compensation and possible subsequent conditions. The agreement must also contain the purpose of transfer
The sale agreement shall be signed both by the seller and buyer, in the presence of the attesting notary. The attesting notary checks the ID of the seller and buyer and verifies the formal validity of the sales agreement. Failure to follow these requirements will result in the transaction being automatically null and void. Note that an attesting notary is required only when ownership (freehold title) of the real estate is assigned. When the right of tenancy (leasehold) or other rights to possess the property is assigned, the presence of the attesting notary is not required. The attesting notary must inform the National Land Survey of Finland of the transaction, and the buyer must apply for the registration of its title at their offices (see Procedure 3).
In November 2013 National Land Survey Finland introduced the E-Conveyancing system. When seller and buyer use the new E-Conveyancing system, no notary is needed to conduct the transaction which can be done online. Both parties must have a strong authentication to log in the system. As of February 2019, most transactions are still conducted following the traditional process.
Time and cost: 1 day, EUR 120 (120 (55 € when using the E-conveyance))
The buyer pays the transfer tax
Agency: Local Bank, Tax Authority or online banking
The transfer tax must be paid to the Finnish Tax Administration within six (6) months of the date of the transfer/purchase agreement. In practice, payment of transfer tax is a prerequisite for the registration of title and, accordingly, transfer tax will become immediately due and payable upon application for registration of title. As the application for registration of title is automatically filed upon completion of the transfer if the e-conveyancing system referred to under Procedure 1 is used, in such case transfer tax will also become immediately due and payable. However, since as of February 2019 the E-conveyancing System is not widely used, the most common practice in Helsinki for paying the transfer tax to the Finnish Tax Administration is online banking.
If the buyer fails to pay the necessary transfer tax within six (6) months of the date of the transfer/purchase agreement, the Finnish Tax Administration may impose a higher transfer tax (20% for each additional month). If the buyer has a delay in the payment of the transfer tax and pays it after the registration of the title, a surtax will be applied (7%). The surtax is calculated from the first day of the delay until the payment date.
Time and cost: Less than one day (online), EUR 84,404.33 (4% of the property value)
The buyer applies for title registration with National Land Survey of Finland
Agency: National Land Survey of Finland
The buyer shall register its title to the property in question with the Title and Mortgage Register within 6 months of the date of the purchase agreement. If the buyer fails to do so within 6 months, he will not lose its right to register its title (although the amount of transfer tax payable will increase, please see Procedure 2 above). Further, the transfer of property will not become opposable against third parties until the buyer’s title thereto is registered.
The application for registration of title may only be delivered:
- By mail to Maanmittauslaitos / Kirjaamisasiat, PL 3300, 65101 Vaasa, Finland;
- By email to [email protected]; or (iii) in person to any office of the National Land Survey of Finland.
The National Land Survey of Finland reviews the preconditions for transfer of title and provided that they are met and the transfer tax has been paid (see Procedure 2 above), registers title to the property in question in the buyer’s name. Provided that the parties are using the e-conveyancing system, the application for registration of title will automatically be filed simultaneously with the signing of the purchase agreement. The transfer of property will not become opposable against third parties until the buyer’s title thereto is registered.
The application for registration of title shall include:
- Evidence of payment of the purchase price if such payment is a precondition for transfer of ownership;
- Evidence of payment of transfer tax (as described under Procedure 2 above);
- Minutes of the board meeting of each of the seller and buyer resolving on the respective sale and purchase of the property. The registration fee can be paid at a bank or online based on an invoice sent by the National Land Survey of Finland post registration.
If the property in question exceeds 5,000 m2 in size (or in the cities of Helsinki, Espoo, Kauniainen or Vantaa, exceeds 3,000 m2 in size), under the Pre-Emption Act (608/1977, as amended), the municipality may have a pre-emption right in respect of the property. If the municipality decides to use its pre-emption right, it shall notify the buyer, seller and the National Land Survey of Finland of its decision to do so within three months of the original sale transaction. The owner of the property may, however, request that the municipality confirms in advance that the right of pre-emption will not be used. The buyer’s title to the property may only be registered after the three-month deadline unless the municipality gives advance notice that it will not use the pre-emption right. Based on the case study assumptions, the pre-emption right will not be triggered by the transaction
Time and cost: 60 days, EUR 119