The discounts and benefits given by the construction companies for the consideration of the new apartment do not pose a risk of tax consequences for the apartment buyers, contrary to what has been assumed in the public.
The Tax Administration has taken a stand on the reductions in company fees received by buyers of new apartments, which many construction companies have recently used as a campaign to speed up apartment sales.
"The tax administration's extraordinary exit was necessary because the issue has raised unnecessary concerns and questions among home buyers", manager Anu Kärkkäinen The construction industry from RT says.
According to the tax administration's policy, consideration discounts and benefits from construction companies are not considered gifts subject to gift tax, because discounts and benefits are not given for the purpose of donation but for sales promotion.
The Tax Administration states that consideration discounts and benefits are primarily about reducing the purchase price. In terms of income taxation, these discounts and benefits can therefore be considered as a reduction of the purchase price, which does not result in tax consequences for the buyer. The reduction in the purchase price received by the buyer only lowers the acquisition cost of the shares he bought.
The Tax Administration also notes that a consideration discount affects transfer taxation only if it is entered in the deed of sale as an item that reduces the purchase price. In other words, the transfer tax is calculated according to the purchase price entered in the contract.
The concern that arose in the public was triggered by the recent release of the Real Estate Association, which stated that the buyer may be at risk of having to pay gift tax when buying a new apartment.
According to the view, which turned out to be incorrect, the risk could arise for the shareholders, for example, when the construction company pays a significant amount of consideration on behalf of the shareholder, such as ten percent of the debt-free purchase price of the apartment.
See also
More information
Anu Kärkkäinen, director, tel. 050 337 6699
Merja Vuoripuro, director of communications, tel. 040 587 2642