Filing and paying tax on rental income from property abroad
Taxpayers can also have rental income from a country other than their country of residence. See instructions for the following situations:
- Rental income from Finland while living abroad
- Rental income from a flat in Finland while living in Spain or Portugal
- Rental income from property abroad while living in Finland
For most taxpayers, rental income from a Finnish source is taxed in Finland. Rental income from property you rent out in Finland is taxed in Finland even if you live in a foreign country.
Tax on rental income is always assessed at the tax rate for capital income. The taxpayer's country of residence does not affect the rate.
We recommend that you ask the Tax Administration to set up prepayments for you as soon as you start renting out a house, apartment or flat located in Finland. You should do this so as to avoid back taxes.
If needed, request a change of the prepayment
If there are changes in your rental income, you must ask the Tax Administration to revise prepayments (to lower them or to raise them). If the rental contract is terminated and you no longer receive income, ask for your prepayments to be cancelled. Log in to MyTax to change prepayments, or call our telephone service.
You can ask for your prepayments to be changed up to the date when the Tax Administration has completed your tax assessment for the year.
CHECK RENTAL INCOME IN TAX RETURNS
All rental income and the expenses that relate to your rental operation must be included in your tax return. If no information on your rental income is included or if corrections must be made, log in to MyTax and make the corrections. You must do this by the deadline date indicated on your return. You must include this information even if no taxable rental income remains after you have deducted your expenses.
If you don't use MyTax electronic filing, you must fill in paper-printed forms to report the income
Example: Maria, who is a citizen of the Russian Federation and lives in Russia, buys a vacation home (an apartment in a housing company) in Finland and rents it out for the major part of the year when she is not having a vacation in Finland herself.
Maria's rental income from the flat is taxed in Finland, and she needs to file Form 7H every year due to her rental income and expenses. Maria can make the same deductions from her rental income as a Finnish landlord would be able to. As Maria also occasionally uses the vacation home herself, she can only deduct the expenses that were paid during the months when it is rented to tenants.
If you live in Spain or Portugal and receive rental income from Finland, the income is taxed in Finland.
If you receive rental income from Finland, report it such that it can be taken into account in the calculation of your tax card, or request prepayments.
Rental income from Finland in 2018 or before that
According to the tax treaty, rental income from an apartment in a housing company in Finland paid to a person living in Spain or Portugal was not taxable in Finland previously. Rental income from real estate in Finland, however, was taxable in Finland even then.
If you receive rental income from foreign sources, your income is subject to Finnish tax. According to tax treaties, rental income from immoveable assets (such as home property) can be taxed in the country where the immoveable assets are located. Under the treaties, double taxation is eliminated in Finland, either by means of the credit method or the exemption method. Rental income from moveable assets (not real estate or apartments) located abroad, on the other hand, is usually only taxed in Finland if the taxpayer lives in Finland.
If you have rental income from foreign countries, you must:
- Log in to MyTax to file your tax return on rental income, or
- Fill out Form 16B, Statement on foreign income (capital income).
Further guidance for those who file on paper.
The credit method refers to Finland taxing income generated abroad but subtracting any tax paid abroad from the amount of tax payable in Finland. Finland has signed tax treaties for eliminating double taxation by means of the credit method with certain countries, such as the other Nordic countries.
If a taxpayer receives rental income from such a country, the Tax Administration
- taxes the rental income at 30% (or at 34% if the capital gains exceed EUR 30,000)
- subtracts the amount of tax that the taxpayer has paid abroad.
Interest on mortgages on let properties is deducted from capital gains in Finland. Taxpayers can ask the Tax Administration to deduct any foreign property tax paid from their rental income as expenses incurred from earning an income.
According to tax treaties, the exemption method applies to rental properties located in
In these cases, rental income is not taxed in Finland, but it may increase the amount of tax payable on other capital gains. This is why income from these countries also needs to be declared in Finland.
If the exemption method is applied, deductions for expenses incurred from earning an income and interest on income generation loans cannot exceed the amount of taxable rental income.