Foreign residents will need to obtain permission to buy real estate in Finland, starting 1 January 2020, as part of new legislation passed in March this year. The applications will need to be submitted to the Ministry of Defence electronically.
"The legislation has been put in place to protect national security," Matias Warsta, Director of Real Estate and Environment at the Ministry of Defense, told Yle News.
"The security environment in the Baltic region has deteriorated over the last decade. We wanted to create a system that lets us monitor and control real estate purchases in Finland to help us secure the national interest of protecting the country," Warsta said.
The new legislation on ensuring national security in land use and real estate ownership applies to properties located throughout Finland, with the exception of the Åland Islands. It applies only to property deals closed after 1 January 2020.
There is no requirement to seek permission to buy shares in a housing company, which is how most apartments and some other residential property is owned in Finland.
The permit has to be obtained by both private individuals who are not nationals of European Union (EU) or the European Economic Area (EEA) states and companies or other entities domiciled outside EU and EEA.
People with dual citizenship don't have to obtain the permit if one of the nationalities is in an EU or EEA country.
"In the case of joint ownership where even one of the partners is a foreign national, permission has to be acquired," Warsta noted.
"Not a very expensive process"
The buyers have to pay a fee to obtain the permit.
"Though the amount has not been fixed yet, we estimate that the fee will be in the range of a couple of hundred euros — it’s not going to be a very expensive process," Warsta said. The fee will not be refunded if permission is refused.
According to The Ministry of Defence website, applications can be submitted in Finnish or Swedish and that it aims to process the applications within three months.
The ministry stated that in the permission application, buyers will have to state their intended use of the real estate.
"The authorities will then make a case-by-case decision and take specific measures depending on the kind of real estate being purchased before granting the permit," Warsta revealed.
Public discussion over foreign land ownership
Public discourse on foreign property ownership in Finland re-ignited late last year, following a major police operation near Turku that focused on a Russian-owned firm suspected of money laundering.
Public records showed that the firm, Airiston Helmi, either bought or sold 9.2 million euros of real estate in the Turku archipelago between 2007 and 2014. The properties were said to be in strategically important areas, as the maritime routes through the islands off Turku serve major ports and contain important data cables.
In September last year, then-Defence Minister Jussi Niinistö said that the legislation then under preparation would grant the government the right to intervene in transactions that it thinks could jeopardise national security.
The new rules can be read in English here.
EDIT 31.10.2019 This story has been edited to clarify that the new rules do not apply to housing company shares and to add a link to the rules in English.
