Finland Rental Income Tax Guide 2026 — Vuokratulo, Pääomatulo & Poistot

taxing rental income in Finland. The guide covers: the classification of rental income (vuokratulo) as capital income (pääomatulo) under the Tuloverolaki (Income Tax Act), taxed at the two-tier rates of 30% (up to €30,000) and 34% (exceeding €30,000) rather than as earned income; the calculation of net rental income (gross rent minus deductible expenses — the deductions include hoitovastike (maintenance charge) paid to the housing company (asunto-osakeyhtiö), the korjaukset (repairs and maintenance — basic repairs are fully deductible in the year incurred, while major renovations (perusparannus) are depreciated over 10 years or more), the rahoitusvastike (financing charge — the capital portion of the housing company loan payment, which is not deductible in the year paid but can be added to the cost basis of the share for capital gains purposes), the mortgage interest (the interest on a loan taken to acquire or improve the rental property, fully deductible from rental income), the property management fees (isännöintipalkkiot), the insurance premiums, the municipal real estate tax (kiinteistövero), the water and utility charges paid by the landlord, and the legal and professional fees); the depreciation of the building (poistot — the annual depreciation rate for a rental building is 4% of the remaining acquisition cost, calculated on the building's portion of the acquisition cost excluding the land value — the declining balance method is used, with a maximum annual deduction of 4% — alternatively, the taxpayer can use the straight-line method at 4% per year for residential buildings and 7-10% per year for commercial buildings); the loss offsetting rules (negative net rental income (loss) can be offset against other capital income — if the total capital income is negative, the loss is carried forward for 5 years as a capital loss, losses cannot be offset against earned income except in limited circumstances); the non-resident rental taxation (non-residents are taxed on Finnish rental income at a flat 35% withholding tax rate (lähdevero) or at the progressive rates if they elect to be taxed as a resident, the filing obligation via the non-resident tax return (rajoitetusti verovelvollisen veroilmoitus)); the special rules for housing company shares (asunto-osakeyhtiö — the most common form of apartment ownership in Finland, where the owner owns shares in a housing company that entitle them to occupy a specific apartment, the distinction between hoitovastike (maintenance charge — deductible) and rahoitusvastike (financing charge — not deductible), the treatment of the housing company loan when the apartment is sold); the tax treatment of selling a rental property (capital gains on the sale of a rental property are taxed as pääomatulo at 30%/34%, the gain is the sale price minus the acquisition cost (including the acquisition cost of the shares, the paid rahoitusvastikkeet, and the cost of major renovations) — the capital gains tax can be deferred if the property is held for more than 10 years (the 10-year exemption for owner-occupied housing does not apply to investment properties), the loss on the sale is a deductible capital loss); and the tax planning considerations (the interest deduction strategy — maximising mortgage interest deductions against rental income, the timing of major renovations, the choice between owning directly or through a limited company (Oy), the impact of the tax-free portion of dividends from a rental property held in an Oy).

Finland's rental market is dominated by housing company (asunto-osakeyhtiö) structures. All amounts in Euros (EUR). For related reading, see our Tax Filing Guide →.

Overview — Rental Income as Pääomatulo

Rental income (vuokratulo) from Finnish property is classified as capital income (pääomatulo) under the Tuloverolaki. The key features are:

Tax rates: Net rental income (gross rent minus deductible expenses) is taxed at 30% on the first €30,000 of capital income per year, and 34% on capital income exceeding €30,000.
Net income calculation: Gross rent received minus allowable expenses = net rental income, which is added to other capital income (dividends, interest, capital gains) for the year.
Integration: The net rental income is aggregated with all other capital income (pääomatulo) and taxed at the two-tier rates. If you have losses from other capital items (e.g., capital losses on stocks), these can offset the rental income.

Deductible Expenses

The following expenses are deductible from gross rental income in the year incurred:

Hoitovastike (Maintenance Charge): The monthly maintenance charge paid to the housing company (asunto-osakeyhtiö) is fully deductible. This covers the building's operating expenses (cleaning, gardening, heating, water, building insurance, property management).
Rahoitusvastike (Financing Charge): The capital portion of the housing company loan repayment is NOT deductible in the year paid. Instead, it is added to the acquisition cost of the shares (the "purchase price" basis) and reduces the capital gain (or increases the capital loss) when the apartment is sold.
Mortgage interest: Interest on a loan taken to acquire or improve the rental property is fully deductible from rental income. This is one of the most significant deductions and can create or increase a rental loss.
Korjaukset (Repairs and Maintenance): Basic repairs and maintenance (e.g., painting, plumbing repairs, fixing appliances) are fully deductible in the year incurred. Major renovations (perusparannus) that increase the property's value (e.g., new kitchen, new bathroom, structural changes) are NOT fully deductible — they are depreciated over their useful life (typically 10 years or more) or added to the cost basis.
Kiinteistövero (Municipal Real Estate Tax): The annual real estate tax (kiinteistövero) paid by the landlord is fully deductible. The rate varies by municipality (typically 0.4-1.0% of the taxable value for residential properties, higher for commercial properties).
Isännöinti (Property Management): Fees paid to the property manager (isännöitsijä) or management company for managing the rental are fully deductible.
Insurance: Premiums for building insurance, landlord liability insurance, and rental loss insurance are deductible.
Water and utilities: If the landlord pays for water, electricity, gas, or internet that is consumed by the tenant (not separately billed), these costs are deductible.
Legal and professional fees: Fees for drafting rental contracts, eviction proceedings, debt collection, and tax advice directly related to the rental activity are deductible.
Travel expenses: Reasonable travel costs for inspecting the property or meeting with tenants (e.g., mileage at the Verohallinto rate of ~€0.46/km) are deductible.

Depreciation (Poistot)

Depreciation allows the landlord to recover the cost of the building over time:

Rate: The standard annual depreciation rate for a residential rental building is 4% of the remaining acquisition cost (declining balance method). For commercial buildings, the rate is 7-10% depending on the type.
Calculation: Depreciation is calculated on the building's portion of the acquisition cost, excluding the land value. For example, if the property cost €200,000 (building €160,000 + land €40,000), depreciation is 4% of €160,000 = €6,400 in the first year. In the second year, depreciation is 4% of (€160,000 − €6,400) = 4% of €153,600 = €6,144.
Housing company shares: For apartments owned through a housing company (asunto-osakeyhtiö), the depreciation is calculated on the taxpayer's share of the building's acquisition cost. The housing company's financial statements provide the building's book value, which is used as the basis.
Straight-line alternative: The taxpayer can elect to use the straight-line method at 4% per year instead of the declining balance method. Once elected, the method must be used consistently.

Loss Offsetting and Carry-Forward

Offset against other capital income: A rental loss reduces other capital income (e.g., dividends, interest, capital gains from stocks) in the same tax year. For example, a rental loss of €5,000 and dividend income of €10,000 results in net capital income of €5,000.
Carry-forward: If the total capital income for the year is negative (losses exceed all capital income), the excess loss is carried forward as a capital loss for up to 5 years. The loss is offset against future capital gains in the order of the oldest loss first.
No offset against earned income: Unlike some countries, Finland generally does not allow rental losses to be offset against earned income (ansiotulo). The loss is ring-fenced to the capital income category.

Non-Resident Rental Taxation

Non-residents who own and rent out Finnish property must also pay tax on the rental income:

Withholding tax (Lähdevero): Non-residents are subject to a flat 35% withholding tax on gross rental income. However, this is levied on the gross amount, with no deductions allowed.
Election for progressive taxation: EU/EEA residents can elect to be taxed under the progressive state income tax regime instead of the flat 35% withholding. This allows them to deduct expenses (hoitovastike, mortgage interest, repairs, depreciation) and pay tax on the net income at the capital income rates (30%/34%).
Filing obligation: Non-residents must file a non-resident tax return (rajoitetusti verovelvollisen veroilmoitus) with Verohallinto. The return must be filed even if no tax is due (e.g., if expenses exceed income).
Withholding by the tenant: If the tenant is a business or entity, it must withhold the 35% tax on the rent and remit it to Verohallinto. If the tenant is an individual, there is no withholding requirement — the non-resident landlord must file and pay the tax directly.

Selling a Rental Property

When a rental property is sold, the capital gain (or loss) is taxed as pääomatulo:

Gain calculation: Sale price minus acquisition cost (including: the original purchase price of the shares/property, the rahoitusvastikkeet paid during the holding period, major renovation costs (perusparannus), transfer tax (varainsiirtovero) paid on acquisition, and legal fees for the sale).
Tax rate: The gain is taxed as capital income at 30% (up to €30,000 of total capital income) and 34% (above €30,000).
Loss: A loss on the sale of a rental property is a deductible capital loss, offset against other capital gains in the year of sale, with a 5-year carry-forward.
No exemption for investment properties: The 10-year ownership exemption (which applies to owner-occupied housing) does NOT apply to rental properties. All gains are taxable regardless of the holding period.

Frequently Asked Questions

Can I deduct the hoitovastike if the apartment is vacant?

Yes. The hoitovastike (maintenance charge) is deductible even if the apartment is vacant and generating no rental income. Expenses incurred during vacancy periods are deductible if the apartment is genuinely available for rent and the landlord is actively marketing it. Verohallinto may require evidence of the marketing efforts (advertisements, listings with agents).

What is the difference between hoitovastike and rahoitusvastike?

The hoitovastike covers the building's operating expenses (maintenance, cleaning, heating, water, insurance, property management) — these are fully deductible in the year paid. The rahoitusvastike is the capital repayment portion of the housing company's loan — this is not deductible but is added to the acquisition cost basis of the shares, reducing the capital gain when the apartment is sold. This distinction is unique to the Finnish housing company system.

Can I offset rental losses against my employment income?

Generally, no. Rental income is classified as capital income (pääomatulo) in Finland, and losses from capital income sources can only be offset against other capital income. Rental losses cannot reduce earned income (ansiotulo) tax. The only exception is if the loss relates to a property that qualifies as the taxpayer's residence and certain strict conditions are met. For most investment properties, the loss is ring-fenced to the capital income category.

Do I need to register with Verohallinto as a landlord?

If you rent out a single apartment or property, you do not need to register as a business. You simply report the rental income and expenses in your annual tax return (veroilmoitus). If you rent out multiple properties professionally (e.g., more than 3-4 apartments, with active management and marketing), Verohallinto may classify the activity as a business (elinkeinotoiminta), requiring you to register for VAT (if turnover exceeds €15,000) and file business tax returns.

What transfer tax (varainsiirtovero) applies to buying a rental property?

The transfer tax (varainsiirtovero) on the purchase of a rental property in Finland is: (a) 4% of the purchase price for real estate (kiinteistö — land and buildings), (b) 1.5% of the purchase price for housing company shares (asunto-osakeyhtiön osakkeet). For a first-home buyer under 40, the transfer tax may be waived (up to certain limits). The transfer tax is not deductible as an expense but is added to the acquisition cost basis for capital gains purposes.

Disclaimer

This guide is for informational purposes only and does not constitute legal or tax advice. Rental income tax rules depend on the type of property, the ownership structure, and the landlord's personal circumstances. Consult a qualified Finnish tax advisor (veroasiantuntija) or accountant (kirjanpitäjä) for advice tailored to your situation. The information reflects the rules applicable in 2026 as of the date of publication.