About Right-of-Occupancy Housing

Right-of-occupancy housing is a form of housing that sits between ownership and rental. The housing security of a right-of-occupancy apartment is comparable to that of an owner-occupied home, because the right-of-occupancy agreement cannot be terminated by the building owner and cannot be made temporary. Right-of-occupancy apartments have been built in Finland since 1991.

A right-of-occupancy holder invests 15% of the apartment’s purchase price as the right-of-occupancy fee. The remaining 85% of the purchase price is financed through a government-subsidized housing loan or interest-subsidized loan. The right-of-occupancy is maintained as long as the holder pays the monthly service charge and meets the obligations specified in the right-of-occupancy agreement. The apartment must be used as the holder’s permanent residence. The right-of-occupancy can also be passed on as inheritance, either to a descendant or in a reverse line of inheritance. A right-of-occupancy apartment cannot be purchased outright at any stage.

The management of a right-of-occupancy apartment is based on a right-of-occupancy agreement between the building owner and the holder. The agreement is a financial instrument that can be used as collateral for a personal bank loan to pay the right-of-occupancy fee. The interest on a personal loan taken for the right-of-occupancy fee is tax-deductible. No transfer tax is paid on a right-of-occupancy apartment.