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11.10.2023

Finnish Confiscation of Russian-Owned Real Estate: Taxation Woes

The Finnish government has initiated discussions about the potential confiscation of real estate owned by Russians who fail to meet their financial obligations related to these properties. The decision has been driven by the challenges faced by absentee Russian owners in paying property taxes and maintenance bills, with banks having long-blocked account access and making bank transfers to Finland virtually impossible.

1. Tax and Debt Challenges: Many Russian property owners have struggled to fulfil their legal obligations, leading to accumulating debts that have put housing associations at risk and prompted the consideration of confiscation measures.

2. Resolution Through Intermediaries: To mitigate these issues, some Russian property owners have explored alternative methods, including paying their debts through friends, agents, or intermediaries.

3. Notification and Contact Difficulties: Finnish law dictates that property owners must be notified of debts in writing or in person, but authorities have encountered difficulties in reaching Russian owners, who are often unresponsive.

4. Current Legislation: The existing Finnish Law on Residential Joint Stock Companies allows for the publication of warnings about confiscation in newspapers and the transmission of information to condominium management bodies in cases where the owner's information is unavailable.

5. Future Legislative Framework: The Finnish Minister of Justice has indicated that new legislative measures will be introduced to address these issues, but the specifics of this framework are yet to be detailed.

6. Russian Property Ownership in Finland: There are approximately 3,000 properties in Finland owned by Russians, though it is unclear whether this figure accounts for owners with dual citizenship. In 2022, Russians acquired nearly 300 properties in Finland, marking a 64% increase from the previous year.

7. Tightening of Entry Restrictions: Finland has progressively tightened entry restrictions for Russian property owners, with the latest regulations requiring owners to justify their presence during property maintenance or repair work. Furthermore, as of September 2023, importing cars with Russian license plates has been restricted based on the European Commission's recommendation.

As discussions continue and new legislation is developed, the situation remains dynamic, impacting Russian owners of real estate in Finland. Property owners are advised to stay informed about these developments and explore alternative ways to meet their financial obligations to avoid the risk of confiscation.

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