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Right-of-occupancy system in practice

System

  • Loan provision for the right-of-occupancy homes comes from the Housing Fund of Finland (ARA). ARA grants a loan for 85% of the total price. The purchaser of the right-of-occupancy pays only 15 % of the total price of the right-of-occupancy home.
  • Resident pays a monthly fee, like rent. The right-of-occupancy fee is below the general rent level in the same area.
  • Guarantee fee equals two months charge.
  • The right of occupancy payment is not subject to transfer tax.
  • Right-of-occupancy home can never be redeemed, it retains its right-of-occupancy status even when owned. In right-of-occupancy home inhabitant has the same security of tenure as in owner-occupied homes.

Applying

  • For applying the right-of-occupnancy homes the applicant must have a queue number from the municipal housing authority. Everybody over 18 years old can apply for the right-of-occupancy queue number.
  • After getting the right-of-occupancy queue number it is possible to fill in the apartment application (only in Finnish) to the registers of the companies offering right-of-occupancy homes.
  • In right-of-occupancy system there is no income limit but the applicant cannot have too much of assets. For over 55 years old applicants there are no assets limit either.
  • The size of the apartment being applied for is not limited.
  • The right-of-occypancy contract can be used as a security for a loan. Interest on the loan taken for a right-of-occupancy apartment is tax-deductible.

Giving notice of the termination of the right-of-occupancy home

  • The original right-of-occupancy payment is always adjusted according to the building cost index by the time when the resident gives the notice of the termination.
  • The notice must always be written and it can be sent electronically via Kotikulma-extranet, or brought or posted to the Asokodit office.
  • Period of notice and maintenance charge liability is 3 months. The 3 month period begins, when our sales personnel receives the termination notice. Right-of-occupancy payment is returned after the period of notice.
  • Right-of-occupancy home can be endorsed to child or parents of the inhabitant or resident family member living in the same household. Right-of-occupancy home can be left as an inheritance.
  • Profit from sale is tax free after two years of residence.
  • The apartment can be rented out for a maximum of 2 years in case the inhabitant himself is working or studying in another city or country or he has some other argumentation.

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