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A new home for over 55-year-olds – Why move into a right-of-occupancy apartment?

09.12.2022 Uncategorized
A right-of-occupancy apartment is a safe and financially risk-free home for persons aged 55 and over. The asset limit does not affect the acquisition, unlike for younger people. See here to find out why and how to get a right-of-occupancy apartment!

At the age of 55 and over, many are looking for a permanent home in good condition. A right-of-occupancy home is a great choice, especially if you are not willing to take out a large mortgage for an owner-occupied apartment.

A right-of-occupancy home is a more stable choice than a rental apartment, as no-one can terminate the contract except for the residents themselves. Right-of-occupancy homes promote safe living – with zero risks.

Is there an asset limit for right-of-occupancy apartments, and what is the prize of a right-of-occupancy home?

The asset limit does not apply to persons over the age of 55. They may acquire a right-of-occupancy home even if they have enough assets to purchase an apartment.

The right-of-occupancy fee is 15 per cent of the home’s purchase value. Most banks also offer loans for right-of-occupancy homes to those in need of additional capital.

In addition to the right-of-occupancy fee, the resident must pay a security deposit, 250 €.

Should I get a right-of-occupancy apartment? Is the residence charge of the apartment affordable? What about other expenses?

An affordable residence charge is an important criterion for most people. In right-of-occupancy homes, the monthly residence charge is lower than the rent for a similar apartment. The price difference varies by city. In the Greater Helsinki area, the rent for a non-subsidised rental apartment is, on average, over 30 per cent higher than the residence charge for a right-of-occupancy apartment.

The costs of major building renovations are shared among all Asuntosäätiö’s right-of-occupancy apartments. Moreover, living in a right-of-occupancy home is care-free. For example, if the refrigerator in your apartment breaks down, Asuntosäätiö will replace it for you.

All residents have access to Kotikulma, which is an electronic information and communication channel. In everyday matters, the residents can contact Asuntosäätiö’s Service Centre, which is available around the clock.

What is a right-of-occupancy queue number?

To apply for an apartment, you need a queue number. Until 31 August 2023, you can get a queue number from the housing office in 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). Read more about the reform of the Right-of-Occupancy Housing Act.

It is advisable to apply for a queue number before you start looking for an apartment. In other words, you can obtain a number even if you are not currently in need of a new 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.

How can I apply for a right-of-occupancy apartment?

You can submit an application for an apartment online. Our online services have been designed to accommodate users of all ages. You will find more detailed instructions here.

The sales negotiator will offer the apartment to several applicants in order. You can and should apply for more than one apartment, as receiving an offer does not yet bind you to getting the apartment.

Sometimes you may have to wait for your preferred right-of-occupancy home, especially if you are looking for an apartment in one of the most popular destinations in the Greater Helsinki area. Then again, you can get an apartment quickly if you are flexible in terms of the location.

The apartment is always offered first to the applicant with the lowest queue number. The applicants’ need for housing, or their current situation have no effect on the decision.

What kind of homes does Asuntosäätiö offer?

Asuntosäätiö owns a variety of right-of-occupancy apartments of different sizes. They include homes in apartment buildings, terraced houses, balcony access blocks, and detached houses. You can even find a right-of-occupancy home in a single-family house.

Is it worth getting a right-of-occupancy apartment for a short period of time? What is the impact of the general increase or decrease in housing prices?

A right-of-occupancy home is an investment that you can get rid of quickly and easily, should you so choose. There is no time limit in the contracts. The period of notice for terminating a right-of-occupancy agreement is three months, after which the right-of-occupancy fee is returned to the resident.

A right-of-occupancy home is a safe choice, especially in municipalities suffering from migration loss, as the selling of a privately owned apartment can be difficult, and the owner may even incur losses when selling their property.

The right-of-occupancy fee is tied to the building cost index, which has long been on the rise. As the general construction costs increase, it is possible to make a profit on right-of-occupancy apartments. When moving out of a right-of-occupancy home, the resident will be paid the profits tax-free if they have lived in the apartment for at least two years.

After living in their right-of-occupancy home for two years, the resident may transfer the apartment directly to their children or parents. The apartment may also be temporarily rented out for a maximum of two years if there is a justified reason for doing so, such as moving to another municipality for a fixed period.

Can a right-of-occupancy apartment be left as inheritance?

A right-of-occupancy home can be left as inheritance by the resident. The recipient may then either move into the apartment or terminate the contract, in which case the right-of-occupancy fee paid for the apartment will be returned to them. Alternatively, the resident can also bequeath their right-of-occupancy home to someone else.

Are the right-of-occupancy apartments in good condition, and am I allowed to renovate my home?

The apartments are in good condition, as Asuntosäätiö renovates the homes after the resident has moved out, if necessary. Residents are allowed to customise the apartment by painting the walls or putting up wallpaper.

For more extensive projects, such as repair work in a kitchen or bathroom, a separate permit must be obtained from Asuntosäätiö. The resident may be refunded for some renovations when they move out of the apartment. Such alterations include, among others, the installation of balcony glazing, provided that the resident pays for the work during the installation.

Why choose a home from Asuntosäätiö?

Asuntosäätiö has a long, active history in the industry, and the company owns properties in more than 30 municipalities. Asuntosäätiö takes good care of the apartments by undertaking renovation work whenever necessary.

Settling into an Asuntosäätiö home is easy. Asuntosäätiö and the individual housing companies organise plenty of community activities, such as volunteer maintenance work and garden parties. 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.