2021
The Act on licencing requirement to buy real estate for buyers outside the EU and EEA has proved necessary
The Act on licencing requirement to buy real estate for buyers outside the EU and EEA entered into force two years ago. According to a Ministry of Defence report, it has proved necessary.
By 30 November 2021, the Ministry of Defence received 1101 applications to purchase a real estate and 1059 decisions were made by the same date. Private individuals were granted 888 licences while businesses and communities were granted 171 licences.
The biggest groups of applicants by nationality are Russian, Ukrainian, Chinese, United States, Swiss, British and Indian nationals. Geographically, the licences granted are fairly evenly distributed between the different regions but there are differences in the locations of properties. The majority of the properties have been acquired for residential or recreational use and approximately 80% of those who were granted a licence already live in Finland.
To apply the Act on the State's Pre-Emptive Right in Certain Areas has been considered less than five times when the Act has been in force but in all of the cases purchases were on a voluntary basis. While transactions were between Finnish actors the pre-emptive right was considered to safeguard and develop the operations of the Defence Forces and the Finnish Border Guard.
The legislation for licence processes is seen to have prevented malpractice in real estate transactions. In addition, the Ministry of Defence’s situation awareness of real estate ownership has improved significantly and cooperation between authorities has worked well.
However, both the legislation on licence requirements to buy real estate and the state’s right of pre-emption need to be specified further. Areas that need to be developed include matters relating to access of information, identification of clients, the sources to fund real estate acquisitions, and national security.
The
objective is to develop legislation so that it genuinely meets the objectives
set for the relevant legislation and it responds to future challenges, too. If
this is the action plan to be set out by Government, the Ministry of Defence is
prepared to initiate the proposal in spring 2022.
The Ministry of Defence’s report
to the Defence Committee on taking national security into account when drafting
legislation on land use and real estate ownership:
https://www.defmin.fi/files/5301/Puolustusministerion_selvitys_puolustusvaliokunnalle_laista_eraiden_kiinteistohankintojen_luvanvaraisuudesta.pdf
Inquiries: Director of Unit Sara Kajander, sara.kajander@gov.fi, tel. +358 295 140 080, and Ministerial Adviser Anu Sallinen, anu.sallinen@gov.fi, tel. +358 295 140 335.
https://www.defmin.fi/files/5301/Puolustusministerion_selvitys_puolustusvaliokunnalle_laista_eraiden_kiinteistohankintojen_luvanvaraisuudesta.pdf