Finnish government proposes ban on real estate purchases by individuals with Russian backgrounds

The Finnish government’s proposed ban on real estate purchases by individuals with Russian backgrounds is unlikely to significantly impact the number of buyers or property prices, according to real estate agents interviewed in southeastern Finland. In recent years, Russian real estate acquisitions have largely focused on this region, particularly around Savonlinna. For example, real estate agency Remax has had a considerable volume of Russian-owned properties listed for sale. However, Jere Pulli, a Remax agent in Lappeenranta, notes that buyers have been scarce, primarily comprising Finnish citizens or dual nationals.

Pulli explains that property prices have been in decline for years since the peak Russian buying surge in the early 2000s. “A summer cottage by Lake Saimaa can now be significantly cheaper by hundreds of thousands of euros,” he added. The main issue for selling Russian-owned properties is whether the buyer can pay the purchase price, which is influenced by if the seller has a bank account in the West.

The Ministry of Defense’s working group has distributed the findings regarding the proposed total ban for public feedback. Defense Minister Antti Häkkänen revealed the details in a press conference, emphasizing that the ban would likely not apply to dual citizens or those holding permanent residency. However, the Ministry will evaluate property transactions conducted by individuals with permanent residency, according to expert Joonas Laito.

Laito also noted that excluding dual citizens from the ban is grounded in two main reasons: ongoing legislative review regarding dual citizenship and the difficulty in monitoring such a ban since dual nationals may use their Finnish passports for property transactions. As of the end of 2023, there were around 39,800 Russian dual citizens in Finland. Meanwhile, Finnish residents with ties to Russia are purchasing vacation properties and homes at lower prices from Russians living in Russia, with nearly half of last year’s sales priced below €30,000. The ongoing sanctions have complicated property maintenance and use, leading to increased sales pressure, according to Markku Kangaspuro, head of the Aleksanteri Institute at the University of Helsinki.