First home for a young person – Why choose right-of-occupancy housing?
A right-of-occupancy apartment is a safe way for a young person to combine the best parts of rental and owner-occupied living. Living is care-free and allows the resident to increase their wealth. Indeed, it is advisable for any young person to focus on the future when considering the different housing options available.
What does right-of-occupancy housing mean? How is it different from renting?
Right-of-occupancy housing is closer to rental housing than owner-occupied housing.
As a resident, you do not own the apartment, and you cannot purchase it for yourself. Instead, you own the right to live in the apartment for as long as you like.
A right-of-occupancy home is an equally care-free choice as a rental apartment. For example, if the refrigerator in your apartment breaks down, Asuntosäätiö will replace it for you. Asuntosäätiö will take care of your apartment throughout your residence period.
Furthermore, you can customise the style of your home, since residents are allowed to paint the walls or put up wallpaper if they wish.
Can a young person afford a right-of-occupancy home?
The resident pays a right-of-occupancy fee for the apartment, which is equivalent to 15 per cent of the purchase value of the apartment. In addition, the resident pays a monthly residence charge, for which housing allowance can be applied for on the same basis as for a rental apartment. The residence charge for a right-of-occupancy home is always lower than the rent for a non-subsidised rental apartment. In the Greater Helsinki area, the price difference is, on average, 30 per cent.
When moving into an apartment, the resident will also pay a security deposit, which corresponds to two months’ residence charge. The security deposit will be returned to the resident when they move out.
How can I finance the right-of-occupancy fee?
You can apply for a home loan for the right-of-occupancy fee. The loan is similar to a loan for an owner-occupied apartment, and the interest on the loan is tax-deductible. The right-of-occupancy contract may be sufficient as collateral for the loan, but the bank may request other collateral, if necessary. To find out if you are eligible for a loan, contact your bank directly.
Asuntosäätiö has many apartments at different price points. The prices vary in terms of both the right-of-occupancy fee and the residence charge. Anyone can find the right home – for the right price – from among Asuntosäätiö’s options.
Why should a young person get a right-of-occupancy home?
A right-of-occupancy apartment is a great way for a young person to increase their wealth for the future.
When the resident moves out, they are refunded for the right-of-occupancy fee. The fee is tied to the building cost index. As long as the general building costs in Finland are on the rise, the right-of-occupancy fee will generate profits.
If you move out after living in the apartment for over two years, the profits will be paid to you tax-free. In addition, if you have paid off a potential mortgage at the same time, you may end up with more money than you initially put into the apartment.
Getting a right-of-occupancy home does not affect the first-time homebuyer’s right to tax exemption.
Where can I find right-of-occupancy homes and how do I apply for an apartment?
You can search for a right-of-occupancy home in Asuntosäätiö’s online service. The service will show you all our apartments, both vacant and occupied. Our vacant apartments can also be found on public housing websites, such as etuovi.com and oikotie.com.
To apply for an apartment, you need a queue number. Until 31 August 2023, the queue numbers are granted by the housing office of the municipality in which you are looking for an apartment.
Due to a legislative amendment, the right-of-occupancy system will soon be reformed, and as of 1 September 2023, the applications for a queue number will be submitted to the national queue number register of the Housing Finance and Development Centre of Finland (ARA).
You must be of legal age to apply for a queue number. It is advisable to apply for a number right away, even if you are not yet looking to move into a right-of-occupancy home.
The residents of right-of-occupancy homes are always selected based on the lowest queue number.
After the amendment enters into force, getting an apartment will be easier and faster than ever, as the new queue numbers will only be valid for two years. This means that it will no longer be possible to hold on to queue numbers for decades or transfer them from one generation to another, which was possible in the old system.
Asset limit – What does it mean?
Right-of-occupancy apartments include asset limits for applicants under the age of 55. In practice, this means that the applicant cannot get a right-of-occupancy home if they have enough assets to finance half of the market value of the apartment in question.
The applicant’s asset level is checked when they reserve an apartment. However, the asset limit no longer applies if you already live in a right-of-occupancy home and want to move to another right-of-occupancy apartment.
How long do I have to live in the right-of-occupancy apartment? What if my situation changes?
You can move out of the right-of-occupancy home whenever you want. The period of notice for terminating a right-of-occupancy agreement is three months, and the contract does not include any time limits.
If you are moving to another location or abroad for a short period of time, you can rent out your apartment temporarily, but only for a maximum of two years.
A right-of-occupancy apartment can also be transferred directly to the resident’s parents or children.
A right-of-occupancy home is a flexible choice. If you are moving to another municipality or looking for a larger home, you can apply for a new apartment from Asuntosäätiö.
Residents in Asuntosäätiö’s apartments can also exchange their apartments directly.
Why should I choose an Asuntosäätiö home?
We will provide you with a home that is in good condition and suits your specific needs. Asuntosäätiö is a non-profit organisation with more than 70 years of experience in the field, and it offers the best housing options for all stages of life. We own homes in over 30 municipalities.
We take care of our apartments, and we carry out necessary renovation work before handing any apartment over to the new resident. We invest in comfort, and we want to make settling into your new home as easy as possible. Asuntosäätiö organises plenty of community activities, such as garden parties and volunteer maintenance work, in which you can participate if you want.
Moreover, the owners of Asuntosäätiö’s right-of-occupancy homes are also members of the “Asoetu” reward program, which provides benefits for long-term residents.
Expert in the article: Lauri Penttinen, Sales Manager, Asuntosäätiö.