Transferee.

The transfer of ownership of real property or securities.

Basis of assessment:

• Transfer of ownership of real property and securities.
• Transfer of real property or securities to general or limited partnerships, limited companies or other corporate bodies if the consideration is a share or a part or if the transfer has been made in the same way as any other capital investment.
• Transfer of real property or securities made as a consequence of the dissolution of a corporate body and transfer based on taking into private use of an asset by a partner or any other distribution of assets.
• Transfer of securities issued by an unregistered corporate body.
• Where real property has been acquired on behalf of an unregistered company, a transfer of founders' shares in such a company is identified with a transfer of the real property.

If also the consideration, which has been used in the transfer, is real property or securities (i.e. the transfer is an exchange) the tax must be paid for both transfers.

The tax is levied on the transfer price, the value of any other consideration or the market value.

For shares the tax base would include – in addition to the purchase price – any payment made by the purchaser that is a prerequisite for the transfer, as well as any liability the purchaser assumes where the seller benefits from the arrangement.

For shares in real estate companies and in comparable real estate-rich companies, certain loan arrangements are included in the transfer tax base. The loans concerned generally are determined in the articles of association and are attributable to designated shares. If the purchaser repays a loan attached to such shares on the transfer of the shares, transfer tax will be due on the amount of the loan repayment as well as on the purchase price of the shares. Transfer tax is also triggered if, at the time of transfer, the purchaser has any right or obligation (based on the articles of association, a shareholders’ resolution or resolution of the board of directors) to repay a loan attached to such shares.

Special rules apply to loans obtained during the construction of a building where shares are transferred during the construction period.

In general, transfer tax on securities only covers securities issued by corporate bodies which have their registered seat I Finland. However, the tax also covers foreign shares in non-Finnish holding companies in case more than 50% of the holding company’s total assets are comprised of directly or indirectly owned Finnish real estate.

Exemptions

The following entities are exempted from transfer tax:

• The State and its institutions excluding the State's business institutions, the Social Insurance Institution, Enterprise Development and Financing Ltd, the Bank of Finland, the Fund for Industrial Co-operation Ltd (Finnfund), the Finnish National Fund for Research and Development and the Government Guarantee Fund.
• Individuals aged between 18 and 39 years are not liable to pay the tax when they purchase their first owner‑occupied dwelling, whether by buying at least half of the shares carrying the right to the possession of a flat in a residential housing company or by buying real property and at least half of a building on it.

The following transfers are exempted:

• Transfers of real property and securities to an EU organ situated in Finland, if the property or securities have been acquired for its official use.
• Transfers of real property or securities to a corporate body which continues a previous activity in connection of a change in a corporate body's form, a merger or a division where the corporate body that is to be divided dissolves; the reorganisation must be realised under the legislation concerning the type of corporate body in question: this exemption is also applied when real property of a savings bank or a co-operative financial institution is transferred to a financial institution which has been founded to carry their activity.
• Transfers where the basis for the transfer is inheritance, bequest, gift, dissolution of joint ownership and, in most cases, distribution of matrimonial assets.
• Transfer of securities quoted on a regulated market or MTF.
• Certain transfers based on the municipalities' right of redemption and their housing management (temporarily in force in 2004 - 2007).
• In the case of a transfer of assets, the tax levied on the transfer of real property or securities is refunded upon application by the recipient corporate body.
• The Province of Åland, municipalities, local communities of a church or a registered religious communities are not liable to pay tax on transfers of real property.

The tax rate is 4 % for real property, 2.0 % for shares in real estate companies and 1.6 % for other securities.

The transfer tax for real property must be paid at the latest when applying for the registration of the title to acquired real property. If the registration has not been applied for or if its application is not necessary, the tax must be paid within six months of the date when the transfer contract was concluded. If the tax has not been paid for transfers that have been realised within the 10 years prior to the transfer in question, the transferee must also pay the tax for these transfers.

The transfer tax for securities must be paid within six months of the date when the transfer contract was concluded. In the case of shares in certain residential housing companies (mainly companies which have let newly constructed dwellings) the tax must be paid within the two months following the transfer of ownership.

In other cases the tax must be paid at the time when the transfer contract is concluded if:

• one of the parties to the transfer is a dealer in securities (defined as an investment service company, a credit institution or a Finnish branch of a foreign investment service company or credit institution) or if such a dealer acts as a broker or commission agent for one of the parties of the transfer;
• the security is sold at a compulsory auction;
• the transfer is made through a real estate agent.

Largely based on transferee's own initiative.

Besides the transferee the tax may also be recovered from a dealer in securities or real estate agent. When a security other than a security traded in the computerised trading system is reported for the entry into a register of a corporate body (e.g. a residential housing company), the transferee or other person liable to pay the tax must present evidence that the tax has been paid. If the transfer has been registered without the presentation of such evidence, the corporate body is liable to pay the tax.

The dealer in securities or the auctioneer is obliged to recover the tax from the transferee if the transferee has not paid the tax, if:

• one of the parties to the transfer is a dealer in securities (defined as an investment service company, a credit institution or a Finnish branch of a foreign investment service company or credit institution) or if such a dealer acts as a broker or commission agent for one of the parties of the transfer;
• the security is sold at an auction;
• the transfer is made through a real estate agent.

Besides ordinary real property, real property also includes the following items:

• unseparated parcels and specified shares of real property;
• leasehold or usufruct of real property which must be registered under the Land Law Code;
• buildings and constructions for the permanent use of the real property.

Securities are defined as shares and interim certificates of share issues, certificates of participation, bonds or other certificates of claim issued by a corporate body where the interest is calculated on the basis of the debtor's dividend or annual result or where the bond or certificate carries right to participate in the debtor's profits, letters of right of subscription and electronic book entries in a computerised trading system.

Non-residents:

If the transferee is a non‑resident but not a branch situated in Finland and belonging to a foreign credit institution, foreign investment service company or a foreign fund management company, the transferor is obliged to recover the tax from the transferee.

If none of the parties to the transfer is a resident of Finland, a permanent establishment of a foreign credit institution or a branch of foreign investment service company, no tax is levied. However, the tax is always levied for the transfer of a share in a residential housing company or other real estate company or corresponding co-operative society.