For New Home Buyers

RS Transaction and Frequently Asked Questions

An RS transaction, meaning a housing purchase under the developer contracting model, is a key part of the process for acquiring new homes in Finland.

What is an RS transaction?

The RS system was created in the 1970s to protect home buyers from financial and construction-related risks in new developments. In practice, RS projects are housing developments where:

  • The project is under continuous monitoring by the bank and other supervisors throughout the construction period.
  • Rakentamiselle on myönnetty erillinen pankin vahvistama RS-sopimus.A separate RS agreement, confirmed by the bank, has been granted for the construction.
  • Home buyers’ funds are deposited into an RS account, which the construction company cannot access until certain conditions are met.

Safe Housing Transaction

The RS system (RS = recommended by the Council of Financial Institutions) is a legal safeguard that protects new home buyers during the construction phase. It ensures that the buyer’s money and ownership rights are secure throughout the entire building process. As an additional layer of protection, buyers have access to important documents such as the housing company’s financial plan, articles of association, and construction specification, which they can review carefully before making the purchase.

The sales agreement is signed only after you have reviewed all the necessary documents. It can be signed either at the sales office or electronically. The purchase price is paid in installments according to the schedule stated in the price list and the agreement, based on the progress of construction. The reservation fee will be credited as part of the purchase price. You can find the payment schedule in the sales phase price list. The final installment of the purchase price is paid only after the apartment has been inspected and handed over.

The debt-free price of a home consists of the sales price and the apartment’s share of the housing company loan. In addition, there are either plot redemption costs or monthly land rent payments, depending on the ownership of the plot. You can pay off the housing company loan and any plot redemption share in full once the building is completed, or alternatively, pay them monthly through capital charges and land rent charges.

Transfer Tax

In addition to the debt-free price of the apartment, a transfer tax of 1.5% is paid on the debt-free price. The tax must be paid within two months after the building is completed. The buyer is responsible for filing the transfer tax declaration and paying the tax to the tax authority. Please note that transfer tax also applies to parking spaces sold as shares.

If the plot has an optional leasehold arrangement and you decide to buy the plot share for the housing company, a transfer tax of 3.0% will be added to the plot redemption price.

Registration of ownership with the National Land Survey of Finland

When you buy an apartment during the construction phase and have paid the full purchase price, and ownership has been transferred to you, the RS bank will notify the National Land Survey of Finland about your apartment ownership.

Please note that if you have purchased a parking space as shares, you must apply for the registration of ownership yourself. The RS bank only reports the ownership of the apartment.

If you buy an apartment that is already completed, you need to apply for the registration of ownership with the National Land Survey yourself. The RS bank only handles ownership registration for apartments purchased during the construction phase.

A new home on your own plot, an optional leasehold plot, or a leased plot?

Buying a new home comes with many important questions, and the type of land ownership is one of the most crucial. What is the difference between owning the plot and having a leased plot? What does an optional leasehold plot mean, and how do these choices affect living costs and financial planning? What should you consider about the plot when thinking about buying a new home?

An own plot means that the housing company owns the land where the building is located. When you buy an apartment on an own plot, the land share is included in the apartment’s debt-free price. This provides stability and predictability in housing costs, as there is no separate land rent fee. Monthly living costs are usually lower, but the apartment price is higher. You also don’t need to worry about the lease ending or rent increases. In addition, the housing company can decide how to use and develop the plot.

On a leased plot, the housing company is built on land owned by someone else, such as a city, municipality, or investment company. The apartment purchase price is usually lower because you don’t pay for the land share upfront. However, you pay a monthly land rent as part of the maintenance fee to the housing company, which makes living costs higher. The land share cannot be redeemed individually. Lease agreements are typically long (for example, 50–100 years), but the rent amount and any increases are defined in the contract. Leased plots are often owned by cities or stable investment companies.

When the lease agreement ends, the housing company usually negotiates a new lease with the landowner. The long duration of agreements and reliable owners ensure continuity of living. In some cases, the landowner may offer the housing company the option to buy the plot. In that case, the apartment owners jointly pay the purchase price, and the plot becomes the property of the housing company—not of individual residents.

An optional leasehold plot means the housing company is built on rented land, but the shareholder has the option to redeem their apartment-specific land share for the housing company either at the time of purchase or later. The estimated redemption price of the plot is not included in the apartment’s debt-free price; it is listed separately in the price list under “plot redemption estimate.”

You can decide whether to pay the redemption share immediately or later. If you do not redeem the land share, you will pay a monthly land rent fee. After redemption, you are freed from paying the land rent fee, and your housing costs decrease. The redemption price is adjusted annually according to the cost-of-living index and must be paid in one installment. A transfer tax (3% of the redemption price) is also added to the redemption cost. The right to redeem transfers to the new owner if you sell the apartment before redemption.

Should you redeem the land share immediately? If you plan to live in the apartment for a long time and have the financial means, redeeming the land share right away can be wise because the price will likely increase over the years. Paying land rent does not reduce the redemption price, so by paying rent, you do not accumulate ownership of the plot. If you know you will move soon, it may be better to keep paying the land rent and let the new buyer decide on redemption.

Housing company loan

If the housing company has taken out a loan for construction, the apartment’s debt-free price includes both the sales price share and the housing company loan share. When the building is completed, you can decide whether to pay your share of the housing company loan in full or partially with your own funds or a bank loan.

You can also choose not to pay off the housing company loan immediately. In that case, you will pay a monthly financing fee. This fee changes according to the current Euribor rate. Paying the financing fee gradually reduces your apartment’s share of the housing company loan.

First-time home buyer and ASP loan

Have you thought about buying your first home? A home is not just a place to live – it also helps you build your wealth. When you own an apartment, every monthly payment reduces your loan and increases your equity.

A new-build property is a great choice for many first-time buyers because it offers modern, low-maintenance living, lower energy costs, and plenty of options to customize your home.

A first-time home buyer is someone who meets the following criteria:

  • They are at least 18 years old at the time of the purchase.
  • They own at least 50% of the apartment shares after the purchase.
  • They plan to move into the purchased apartment as their permanent home and complete the move within 6 months of the purchase or the completion of the new-build property.
  • They do not currently own, and have never owned before, more than 50% of the shares in any apartment or any residential building.
  • If there are two buyers, each must own at least 50% of the shares, and both must meet the other conditions listed above to be considered first-time home buyers. If one of the buyers does not meet the criteria, the other can still be considered a first-time home buyer, provided they own at least 50% of the shares and meet all the other requirements.

ASP loan

An ASP loan is a government-supported home loan designed especially for first-time buyers, offering a lower interest rate. You can qualify for an ASP loan if you started saving in an ASP account between the ages of 15 and 44. A spouse can be added to the ASP account even if they are over 45. The same applies to a partner if they share a child with the ASP account holder.

With an ASP loan, you get several valuable benefits, such as:

  • You get a state guarantee for the ASP loan.
  • If you have saved money in an ASP account and plan to take out an ASP loan, you need to have your own savings equal to 10% of the apartment’s purchase price.
  • In addition to the regular deposit interest, an ASP account earns extra interest.
  • The ASP loan includes government interest support for the first ten years.

ou can take out an ASP loan from most Finnish banks. You can compare offers and apply for the loan from the bank you prefer – the ASP account does not need to be in the same bank where you apply for the loan.

Benefits of an RS agreement for home buyers

Safety: RS projects offer extra security because the bank and independent inspectors monitor the progress of the construction.

Clarity: Payment installments are spread out as construction progresses, making it easier to plan your finances.

Warranty period: After your apartment is completed, you have the right to repairs during the warranty period if any defects appear.

Reliability: The RS system ensures that the project has a solid financial foundation, reducing the risks of uncertainty.

Tips for home buyers considering an RS agreement

  • Review the RS agreement: Ask the developer for the RS documents and make sure all the conditions are met.
  • Monitor construction progress: RS projects give buyers the chance to stay updated on the different stages of the project.
  • Secure your financing early: Plan the RS payment schedule together with your bank.
  • Yhteenveto

Summary

An RS agreement makes buying a new apartment safer and more transparent. It protects you from financial and technical risks throughout the entire process, from reservation to the warranty period. If you are looking for a new home, an RS property can be an excellent choice, offering peace of mind and security for one of life’s biggest investments.

Is there something you’re still wondering about?
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