Gunta Paavola, Latvijas Avīze journalist in Finland
The news that Finland will ban Russians from buying immovable property turns out to be an exaggeration
In the spring, the Finnish Minister of Defence, Antti Häkkänen, proposed a complete ban on the purchase of immovable property by Russians to protect national security interests. The Minister instructed the legal unit of the Ministry of Defence to draft a proposal for a law, which was submitted to the government for discussion this week. The draft law is expected to be submitted to Parliament later this year. However, will it significantly reduce the influence of Russians in the Finnish property market?
Only a few have been refused
Until now, all non-European immovable property buyers have needed a permit from the Finnish Ministry of Defence. Currently, the Ministry is paying closer attention to immovable property transactions by persons close to Russia, but in practice almost all purchases by Russians have been approved, except in a few cases.
A law requiring permission from the Finnish Ministry of Defence for foreigners wishing to buy immovable property came into force in 2020, and since then a ban on the sale of immovable property to Russians has been imposed in only ten cases.
So far, the last time the Ministry refused a permit was for a property deal by a Swiss and Russian citizen and owner of a satellite navigation company on the sanctions list in Ukraine in Sysmä, near the second largest lake in Finland, Päijänne. However, the Ministry of Defence admits that not all potentially suspicious transactions have been prevented due to bureaucratic requirements.
Properties – also nearby strategic objects
One of the most interesting and recent immovable properties, which the Russian-Israeli dual citizen was granted permission to purchase, is located on the eastern border of Finland, a few kilometres from the Southeast Finnish border guard headquarters, the Immola garrison and an airport also used by border guard helicopters, according to the Finnish national news service YLE.
Last month, the largest Finnish evening newspaper Iltalehti investigated the immovable properties of Russian-linked individuals and concluded that a disproportionate number of properties purchased and to be purchased are located near high voltage lines of the Finnish electricity supply grid Fingrid, Defence Forces facilities or critical infrastructure. Fingrid is owned by the Finnish government and pension funds and is responsible for about 80% of electricity transmission in Finland. The newspaper has discovered that some of the cyber-attacks on the Finnish electricity grid have been of Russian origin. There have also been several cases of water supply espionage in Finland this year, with several water supply facilities being hacked. According to the Finnish police, information is being sought on vulnerabilities in critical infrastructure. As a reminder, the most serious case of alleged sabotage against Finland took place last autumn when the Balticconnector gas pipeline between Estonia and Finland was damaged when the Russian-linked Hong Kong ship Newnew Polar Bear crossed the pipeline with a dropped anchor.
An interesting situation has arisen with the Helsinki Arena, owned by Gennady Timchenko and the Rotenberg family, who are under international sanctions because of the Russian war in Ukraine.
Because of the sanctions, the company owning the arena has not been able to pay the maintenance bills, as the Finnish Ministry of Foreign Affairs specified in June that third parties are not allowed to do so.
For example, the hall owes more than EUR 100 000 to the City of Helsinki. The central heating and electricity have already been cut off to the hall. This autumn, a process to buy out the property is expected to start, which could take several years.
Indulgence – permanent residence permit
In the current version of the new draft law, Finland plans to ban Russians from purchasing any type of immovable property for the duration of the illegal war. The ban on buying property would apply, for example, to private homes, summer houses, land, factories and warehouses.
However, there would also be significant exceptions to the restrictions imposed by the law, which cast doubt on its effectiveness. Exceptions would include, for example, Russians holding a Finnish permanent residence permit, which is issued in Finland for an unlimited period, and Finnish-Russian dual citizens, who are also far from few. The latest information from the Finnish Ministry of the Interior (for 2023) shows that at the end of last year there were almost 40 000 Finnish-Russian dual citizens permanently residing in Finland. By the end of 2021, nearly 82 000 people of Russian origin were living in Finland, and this number has only increased since Russia started the war in Ukraine. Most of these people would therefore not be prevented by law from buying property in Finland.
Permanent residence permits have also been issued to Russians this year: in the first seven months, 797 Russians have been granted permanent residence permits; in 35 cases, no residence permit was granted and the process was terminated for eight persons.
The Ministry of Defence would therefore continue to examine immovable property transactions planned by Russians with a permanent residence permit in Finland even if the new law is approved. But transactions by dual citizens would not be allowed for two reasons, Ministry of Defence expert Joonas Laito told the Finnish national news service:
“First, the laws on dual citizens are still pending before the government, and second, dual citizens can register property with a Finnish passport, making it more difficult to enforce the ban on immovable property acquisitions.”
The sanctions imposed at the beginning of the full-scale war have also led to a noticeable drop in the sale of immovable property by Russians, as the seller needs to have a bank account outside Russia. As a result, the prices have fallen, in some cases by several hundred thousand euro. In response, however, properties are being exchanged, thus bypassing the requirement to open a bank account.
In the past, people from St. Petersburg and Moscow were often attracted to Finland by the natural surroundings with mushroom and berry picking opportunities under the right of public access (see reference).
But now Russians living in Finland buy cheap property from other Russians, most often those living in Russia, because sanctions have made it more difficult to maintain and use the property. The largest number of such properties are in Southeast Finland and Savonlinna.
Requirements for a Finnish permanent residence permit
* Permanent residence permits are issued for an unlimited period of time – they are indefinite.
* You can apply for a permanent residence permit after four years of residence in Finland with a long-term residence permit, known as an A permit, if the requirements for its issue are still met.
* The requirements for a permanent residence permit are to become stricter: six years’ continuous residence in Finland, and proficiency in Finnish or Swedish (both national languages in Finland). Currently, there are no national language proficiency requirements for permanent residence permit applicants.
What the right of public access allows in Finland
* The right of public access, or “jokamiehenoikeus” in Finnish, is a right to go mushroom picking, berry picking and camping in both public and private forests in Finland, within the established distance around private residences. Campfires require permission from the landowner.
