Are there any obstacles to selling an investment property I personally own to a company in which I am a shareholder? Let me clarify –>
In other words, can I sell that investment property “in parts”? For example, could I sell, say, 10% of the property at a time, at the pace the so-called company has the money for it? Or maybe in 20% or 50% installments?
The reason for this arrangement is obvious –> a personal loan has already been granted and exists, but the company cannot get financing on the same terms, so it could buy a share as the company accumulates money… —> of course, the share of rental income and expenses must then be calculated in percentages according to the ownership shares, but since I am a shareholder myself, it is possible.
Of course, I would prefer to buy it all at once, but the company doesn’t have the money for that.
Is something like that possible to implement and legal? Of course, the transfer tax (varainsiirtovero) goes down the drain when selling “from oneself to oneself,” but are there any other problems?
Have you considered how you factor in your personal loan? If the bank has granted you, for example, a €200k loan with your investment property as collateral, and you initially sell off, say, 10% of it, could the collateral value decrease in the bank’s eyes? Of course, the loan amount is constantly decreasing, which “releases” collateral, but for the bank, having multiple owners of an investment property or ownership via a limited company (Oy) can make the equation riskier.
Regarding the one with the housing company loan, where the apartment acts as the collateral and is “free” from a personal bank loan, it’ll probably be quite straightforward since the share certificate isn’t tied up anywhere… I guess I’ll have to do it by checking which share numbers I own (e.g., 495–555) and then selling those numbers in parts, figuring out the percentage from that—for example, selling 495–525 first and the rest later, or something like that. I wonder, though, if there will be fees to the National Land Survey (Maanmittauslaitos) for registering the ownership, which might make the whole thing pointlessly expensive?
As for the one where I have a personal loan, you’re right—it’s probably not that easy to just transfer shares of that share certificate to the company… So it likely isn’t enough to just do the deal on paper if the shares don’t actually transfer in the transaction (i.e., the bank would have to be involved). My idea was to handle it without the bank, but that won’t work since the bank holds the share certificate as a pledge, and I obviously can’t sell pledged property to “myself” in installments just on paper… it probably wouldn’t be legal for me to draw up bills of sale saying 50% is sold to the company at price X, covering share numbers 495–525, while those share certificates are held by the bank… until the loan is paid off.
But with the property that has the housing company loan, it’s a good thing; I think I’ll carry that out by selling in installments, since the company doesn’t have enough cash to buy it all at once at this stage anyway…
Initially, you personally own (100%) shares 495-555.
You draw up the bills of sale and sell, for example, a 10% stake in the shares in question to your company (ownership ratios after the sale being 10% and 90%).
Next time, your company buys another 10%, after which the ownership ratio is 20% / 80%, etc.
National Land Survey (Maanmittauslaitos) fees likely depend on whether the share certificate is in electronic format. If it is, it is worth noting a delay of several months in recording the transactions. And, of course, the transfer tax (varainsiirtovero). As I see it, the property manager (isännöitsijä) must be notified of the sale. The company or other shareholders are unlikely to have a right of redemption (lunastusoikeus) for the shares.
(Bubbling under: I was once on the board of a housing company, and a couple living in the building would shuffle their ownership stakes annually. Sometimes one would buy 20% of the flat from the other, and sometimes the other would buy 35% from the first. However, a transaction was made every year. The reason for this arrangement was never clear to me. Apparently, it wasn’t about gifts or similar, as the ownership shares were fiddled with in such a seemingly random manner.)
Why does it have to be sold? You could just transfer the asset to your company. The term used for this is a contribution in kind (apport). Especially if the goal is to accumulate assets within the company.
As far as I know, a contribution in kind requires an auditor’s statement, even if the company itself is not required to use an auditor. Because of this, a sale is likely the simplest way to transfer assets to the company.
The apartment is 100% owned by you
No bank loan on the property
The LLC (Oy) is 100% owned by you
The LLC doesn’t have the funds to buy the apartment from you
The goal is to eventually transfer the apartment to the LLC, e.g., for lighter taxation
Based on this information, in my opinion, the most sensible and straightforward way would be to sell the apartment 100% on debt to the LLC. That is, so that you are the creditor and your limited company is the debtor:
It avoids the paperwork caused by a partial sale of the apartment.
Then if/when you want to withdraw money from the company, you do it tax-free by paying back your loans to yourself. In other words, you transfer lightly taxed rental income from the company’s pocket to your own pocket tax-free up to the price of the apartment, thus saving on dividend taxation.
Rental income immediately and fully falls under the lighter corporate taxation, meaning you save on income taxes.
The only negative side to selling on debt is that the LLC’s debts to the owner will likely weaken the chances of obtaining bank financing, if you intend to get some for the LLC. However, for an LLC, even the interest rate on a bank loan is higher. For the aforementioned reasons, an LLC should prefer properties with housing company loans (taloyhtiölaina).
If you still decide to sell only a part, I have personally done it simply by marking the ownership percentage in the deeds of sale, and I haven’t started splitting the apartment shares in any way. For example, if the apartment’s share numbers are 495-555, they can be divided by percentages, so that the LLC owns, say, 20% of those specific shares, rather than trying to split individual shares between owners so that one owns 495-x and the other owns (x+1)-555.
Individual shares within a housing company’s share group cannot be sold. It is always the entire share group or nothing, with the exception of dividing an apartment or merging it with another unit.
Share group = the shares entitling the holder to the possession of a single apartment.
A share group can have multiple owners with equal or varying ownership stakes.
This article from Hesari about a structural loophole in the Hitas system is interesting.
In principle, this should allow for
1: Transferring your own apartment into the name of an investment company and/or
2: For an apartment investor to finally accumulate multiple Hitas apartments under a company rather than under their own personal identity code. The city is unlikely to exercise its right of pre-emption unless the price is really low. And if they do, so what?
Is that update on Instagram behind a login? I didn’t find anything from that link other than an advertisement that didn’t reveal the portfolio situation.
It is noteworthy that while rents rose slightly on a national level, they fell in the Helsinki metropolitan area. In Vantaa, by as much as one percent.
These statistics still do not reflect the discounts and benefits tied to new rental agreements, the volume of which seems to have continued to grow last year.
How was 2025 for the forum members in real estate investing?
For me, the year started with a bit of a rush and pressure, as by chance, three apartments had to be rented out at the same time. Somehow they all got filled (Helsinki) and there was no major need to lower rents. In one property, there was a €50 setback, but the previous rent had been higher than average anyway. Otherwise, the year brought no surprises. Steady going.
In August, a deal was closed on a Lapland cabin project under construction. It was completed in December, and the first tenant arrives in a week. Tourism in Lapland continues to be strong, and at least for now, the returns have been good. Next Christmas is already sold out, and the quickest ones are already inquiring about two years ahead. There is still room for improvement, though. Clearly, a higher price should be charged for Christmas, as it sells easily even when prices are increased. Additionally, I need to think about how to reduce the number of so-called “orphan days” (empty days between bookings) in the calendar. I’m also considering what the optimal size and type for a Lapland property would be. A small or medium-sized cabin, or should it be, for example, a terraced house or an apartment next to the ski lift? My gut feeling is that the average group size is ultimately either two adults or two adults with two children. Larger groups are more of an exception, and it’s probably not worth building the property around them. The same applies to the so-called luxury segment. There are more and more travelers for whom Finland’s price level specifically is not an issue, but are there enough of them to make acquiring a significantly more expensive property worthwhile?
Thanks for asking, the year was quite good after all.
I was operating with three properties until the end of the year, when I bought my first property outside of Oulu.
One tenant changed, two stayed. Rent was increased for two and stayed the same for one. I’m quite satisfied with three of the tenants, although one repeatedly pays rent about a week late. When the tenant changed, a small painting job was done, but otherwise it has been quite carefree.
The fourth property transferred to my ownership at the beginning of December. The tenant announced at the start of this month that after graduating, they will move back to their hometown for work, and the apartment will be vacant at the beginning of March.
I posted an ad on Vuokraovi, but demand has been somewhat sluggish. I have one viewing tomorrow, but I’ll probably have to list the property on other services as well.
I’ve also started to find the idea of buying a fell property (tunturikohde) intriguing, but so far I haven’t found a suitable one. It feels like price levels are quite high and sellers try to extract the profit from the “rental potential” at the time of sale.
Regarding cottages and holiday apartments that have been in rental use, it’s easy to check the booking calendar. When buying with leverage, it seems that you can’t even cover the fixed costs through renting, and running short-term rentals is quite a task in itself.
Well, let’s see if a suitable property comes along. I’m most interested in the Syöte area, but other locations are not ruled out either. There would be personal use as well, so this doesn’t have to be my best investment ever in financial terms.
We had five million euros in debt. Now there’s 3.7 million left.
Our wealth grows by hundreds of thousands every year.
I admit that we got carried away during the boom and took big risks.
Here are 5 reasons why it’s worth investing in apartments:
cash flow
preservation of value
possibility of leverage
opportunities to influence returns, e.g., through renovations
tax perspectives: you can deduct maintenance fees, interest, etc., which improves net income compared to many other forms of income
And then my two cents: It’s nice that they admit to taking big risks, but there’s nothing new here. High risks were already acknowledged when the apartments were acquired. Instead, admitting that the risks have materialized has always been conspicuous by its absence, and the same pattern continues.
With that turbo-leveraged slum apartment strategy, leverage in particular has worked against the investors. Similarly, cash flow has likely been in the negatives, for example in that row house in Savonranta, as the apartments have become deserted.
Preservation of value works as a kind of backbone, but as we’ve seen now, values can decrease even in growth centers. In declining towns, where this couple also operates, I wouldn’t expect value to be preserved. Additionally, they have very illiquid properties in their portfolio, the pricing of which is not as efficient as that of studio apartments in apartment buildings. I could almost eat a hatful of shit if, for example, that 100-year-old wooden house in Pori were sold even close to the purchase price (~600k).
I don’t understand the tax point at all. Expenses for the production of income are deductible in all types of investing. In contrast, real estate investing doesn’t offer the same opportunities as accumulating index funds and equity savings accounts (OST) to defer taxes into the distant future. Apartments don’t offer the possibility of a 1,000-euro tax-free sale per year. Apartments don’t allow for the effortless utilization of tax-free gifting.
So, those listed points can also turn against the investor. The only point I completely agree with is that a real estate investor can put in the work themselves to increase the return on their investment.
That’s exactly how it is. Furthermore, even if the location of a property were good in principle, it might have completely the wrong kind of building on it. That Pori case is a good example. If a modern apartment building were on that lot, the location would be quite excellent: near the riverbank and opposite a full-service shopping center. But when there’s a decaying shack on the lot, whose electric heating costs and the amount of noise from the heavy traffic passing under the window we can only guess at, even the location won’t save it.