House owners can influence their living costs

If you have never owned a house before, you may have a lot of questions about living in one. Because a house owner is liable for all maintenance-related costs, one frequent question concerns the living costs and how they change compared to an apartment.

According to our Economist Juho Kostiainen, single-family houses are usually subject to the same costs as apartment blocks, but they are just financed differently. He also mentions that the living costs per square metre are not necessarily higher in a house than in an apartment.

Some common house repair and maintenance costs include exterior house painting, road maintenance, private road snow clearance and chimney sweeping. 

“Sometimes costs may be lower for a house owner than for an apartment owner, as you can take care of small renovations and outdoor maintenance yourself,” says Juho Kostiainen.

If you’re planning to buy a house, consider how much time you’re willing to spend on chores inside and outside the house, such as gardening and snow removal.

Typical expenses for a house owner:

  • real estate tax and plot lease (if appropriate)
  • waste collection fees
  • electricity and water charges
  • insurance premiums
  • heating and energy costs.

As heating and other energy use usually constitutes the single largest cost for a house owner, you should pay attention to the house’s energy efficiency class.

Read more about energy efficiency classes

A single-family house is usually a property

When you buy a single-family house, you will practically always buy a property. A property usually means a plot of land and any buildings standing on it. Even if the house stands on a leased plot, it is usually a property. 

In some cases, a single-family house can also be part of a housing company. Such houses are usually called ‘erillistalo’ in Finnish.

Buying a property differs from buying shares in a housing company in some respects, such as taxation and responsibilities. Property owners pay annual real estate tax, which is calculated by multiplying the property value by the real estate tax rate determined by the relevant municipality. 

As the owner of a house, you are responsible for carrying out any necessary renovations and other house maintenance activities on time.

When you start looking for your dream house, pay attention to the location and the price level in the area. You should also check whether the house stands on owned or leased land and whether there are any unused building rights. 

Other important items to check include the final inspection and any related documents – especially if the house has been constructed recently.

Checklist for house buyers

  1. Have the condition of the house assessed by a professional.
  2. Go view the property and read the related documents carefully.
  3. Prepare a preliminary agreement on the property transaction.
  4. Close the transaction either digitally or in person at a bank branch.

Buying a house without a condition assessment carries a risk

When you’re considering buying a house, pay attention to its age and condition. To avoid unpleasant surprises, it’s always advisable to have the condition of the house assessed by a professional.

With a condition assessment, you should get a clear picture of the condition of the house and an idea of the required renovations and potential risks. If the condition has not been assessed by a professional, you should always arrange for this before you make a decision to buy the house. 

According to Juho Kostiainen, a buyer needs to consider what kind of renovations will be required in the future. That’s why you should ask the seller or the real estate agent about the repairs or renovations that have already been carried out.

“If your house gets damaged or you run into a problem, you are responsible for fixing the situation,” says Juho Kostiainen.

One way to prepare for unexpected expenses with a house is building a buffer in a savings account.

Read more about building a buffer

Key documents in buying a house

We have listed here a few important documents that you should read before you buy a house. Ask for the documents from the real estate agent, or directly from the seller if they are selling their property without an agent. You should also check that the documents are as recent as possible.

  • The certificate of title proves who owns the property and can be used for checking the property’s basic details. You can also see the details of the registered title on the property or a pending application for a title registration. 
  • The certificate of mortgages and encumbrances includes any mortgages confirmed by the National Land Survey of Finland and any encumbrances on the property, such as road rights.
  • The extract from the cadastre contains information about the property and its formation. The extract from the cadastral index map presents the borders of the property.

A purchase offer for a property is called a preliminary agreement

In the case of full properties, the parties to the sale transaction are bound by a preliminary agreement on the property. Content-wise, a preliminary agreement is fairly similar to the final real estate sale agreement, and it must be made on a standard form.

In the preliminary agreement, the parties agree on the upcoming real estate sale at a certain price and on certain conditions. The parties commit to the transaction that will be concluded at a later date.

Both the seller and the buyer will sign the preliminary agreement, which will be certified by a notary. 

Buying a house differs from buying an apartment

When you buy a property (typically a house), the process is slightly different than when you buy shares in a housing company (typically an apartment). For example, when a property transaction is finalised in person at the bank, a notary must also be present to certify the transfer of the property.

After the transaction is finalised, the new owner must apply for a title registration, meaning the registration of their ownership, in the National Land Survey of Finland’s title and mortgage register.

In addition, the transfer tax levied on the transaction price is 3% for properties, which is higher than for shares in housing companies.

Read more about property transactions

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