The hard fact is that the information in the property registers of municipalities and the Finnish Tax Administration is not up-to-date. Registry entries may often be incomplete or inaccurate. Municipalities therefore fail to obtain even hundreds of millions of euros per year in property tax revenue. At the same time, municipal economies in difficult financial circumstances have long sought savings through every possible means. Instead of raising tax rates, an excellent option would be to correct the tax base by updating property data. 

As many as 20 per cent of buildings outside the property tax system 

From a municipal perspective, property tax is a stable and safe source of income for municipalities, and its yield is easily predictable. For a number of reasons, however, a significant amount of building mass is not included in the property tax system, as these buildings are not included in the registers of any governmental entity.   

Due to incomplete and incorrect register data, a significant proportion of taxable properties remain beyond the scope of the property tax. As many as 20 per cent of buildings may be beyond the scope of property taxation. Correcting the errors and bringing the missing buildings within the scope of the property tax would significantly increase the tax revenue of municipalities and contribute to the equal tax treatment of property owners.   

The property tax 2.0 project creates direct benefits 

  • Significant increase in property tax revenue 
  • Reduces the pressure to increase the municipal property tax rate (raising the tax rate is always a negative message, even if it increases the amount of income for shared use) 
  • Increased fair treatment of those liable to pay tax  
  • Improved quality and consistency of official registry information 

Taxation can be corrected retrospectively with a demand for correction 

From the perspective of property owners, the data of the Population Register Centre and the Finnish Tax Administration is often incomplete or inaccurate, affecting the tax value of buildings and the amount of property tax that is paid.  

As data inspection can be difficult and resource-intensive for property owners, FCG carries out property tax checks for property owners throughout the year.  

As data inspection can be difficult and resource-intensive for property owners, FCG carries out property tax checks for property owners throughout the year. With demands for payments, it is possible for taxation to be corrected retroactively for the past three years. The currency of real estate tax information is also useful in the due diligence phase of property transactions, for example. The work also contributes to responsible action, for example, through fairer and more consistent treatment of those liable to pay tax. 

Significant property tax revenue for the wind power sector 

Wind power plants built in Finland up to the end of 2018 bring municipalities a total of more than EUR 400 million in property tax revenue over their 20-year lifespan. The tax revenue received by individual municipalities depends on the construction costs of the power plant, the volume and power of the wind turbines, and the municipal property tax rate. We prepare property tax reports for the wind power sector for both operators and the municipality sector. 

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Teijo
Salmi
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