Selling overseas residential property
If you sell a house or an apartment that you own in a foreign country, the tax on the capital gain or loss depends on the country where the apartment is located. If you live in Finland, you must pay tax to Finland on all your income, including any foreign-sourced income that you may have. Normally, if you receive a capital gain, you must also pay tax to the country of source. The Finnish Tax Administration eliminates any double taxation when assessing your taxes in Finland.
Double taxation can be eliminated either by the credit method or by the exemption method. The choice between the two methods depends on the tax treaty that has been signed between Finland and the country where the apartment is located.
For example, if the apartment you sell is located in a Nordic country or Spain, the credit method is applied. The Finnish Tax Administration imposes tax of 30% on capital gains amounting to under €30,000. If the capital gains exceed €30,000, the tax rate is 34%. Any tax you pay abroad will be credited in the Finnish assessment.
However, the treaties signed with France and Egypt require that the exemption method is used.
Read more about Elimination of double taxation from individual customers
Report capital gains and losses in your Finnish tax return
If you own property abroad and sell it for a profit, the rules on how such a capital gain is calculated are the same as the rules applied in Finland. If you have owned an apartment and used it as your permanent home for at least two years without interruption, the capital gain you may receive is exempted from tax in Finland.
If you have capital gains or losses from abroad:
- submit details in MyTax or
- file Form 16B, Statement on foreign income (capital income) on paper.
Further guidance for those who file on paper.
Living in Spain or Portugal and selling an apartment in a housing company on or after 1 Jan 2019
As of the beginning of 2019, Finland collects tax on any capital gain that a person living in Spain or Portugal receives when they sell an apartment in a housing company in Finland.
If you receive capital gains from Finland, apply for prepayments.
Read more about taxation changes in 2019 for those receiving pension income from Finland and