Finland: A Real Estate Overview

Market Review 2026

Over the past year, cautious signals of recovery have begun to emerge in the Finnish property market, though the pace of improvement remains modest and uneven across segments. According to KTI Finland’s transaction statistics, the Finnish real estate transaction volume increased markedly in 2025, reaching approximately EUR4.4 billion for the full year – nearly double the exceptionally low total recorded in 2024. This acceleration in transactions reflects a pick-up in market activity after a prolonged period of subdued deal-making.

Residential markets, in particular, experienced increased activity, with used housing sales hitting multi-year highs later in the year, signalling that demand in key sub-segments was regaining momentum. Despite this improvement in volumes, prime yields have only marginally softened and remain elevated compared with pre-downturn averages, underscoring persistent valuation adjustments and investor caution.

Investor focus remains selective, with foreign capital playing a notable role in driving transaction volumes, especially in larger and more liquid sub-markets. However, overall market sentiment continues to reflect macroeconomic uncertainties, regional structural demand differences, and varied performance across property types. Supervisory authorities have reiterated that while increased deal flow is a positive development, underlying financial and valuation risks in the real estate sector remain observable.

Reform of the Construction Act

The Construction Act (Rakentamislaki 751/2023), applicable as of 1 January 2026, introduced significant substantive and procedural reforms to the building permit regime. A central change is the introduction of mandatory climate-related documentation: building permit applications submitted from 2026 onwards must include a climate declaration and a building product inventory assessing the project's lifecycle carbon footprint. These requirements integrate sustainability considerations directly into permitting and final inspection processes.

In addition, the act introduced statutory time limits for municipal authorities when processing building permit applications, aiming to increase predictability and efficiency in construction projects. Collectively, these changes signal a shift in policy towards promoting low-carbon construction practices and enabling more efficient, digitally driven permitting processes.

Reform of the Land Use Act

Following the division of the former Land Use and Building Act, a new Land Use Act (Alueidenkäyttölaki) is expected to enter into force during 2026. While construction-related regulation has been transferred to the Construction Act, the new Land Use Act will govern spatial planning and zoning.

The reform seeks to:

• simplify and accelerate land-use planning procedures;
• clarify the legal effects of different zoning instruments; and
• strengthen municipalities’ planning autonomy.

Particular emphasis is placed on improving coordination between local, regional, and national planning levels, as well as enhancing legal certainty for landowners and developers in zoning decisions.

Reform of the Act on Transfers of Real Estate Requiring Special Permission

Amendments to the Act on Transfers of Real Estate Requiring Special Permission (Laki eräiden kiinteistönhankintojen luvanvaraisuudesta 470/2019) made in 2025 have strengthened state oversight of direct property acquisitions by non-EU and non-EEA buyers. Under the revised framework, acquisitions may be subject to prior approval where the property is located in an area relevant to national defence, critical infrastructure, or national security more broadly.

The authorities are empowered to refuse permission where an acquisition is considered to pose a security risk. In practice, the reform increases scrutiny of foreign ownership in strategically sensitive locations and reinforces national security considerations in real estate transactions. It should be noted, however, that the act does not apply to, for example, transfers of shares in housing companies and real estate companies.

Taxation

As of 1 January 2026, there have been no new changes in Finnish tax legislation specifically affecting the acquisition, holding or disposal of real estate. However, discussions on property tax reform continue. Under proposals currently under consideration by the Finnish government, the annual property tax base would be reconfigured to reflect each property's fair market value, potentially materially increasing tax liabilities for owners once implemented. The precise details and timeline remain uncertain.