Short-term rental rules and VAT in Finland: a guide for Levi owners
VAT on holiday lettings
VAT guidance reviewed by Liisa Simoska of SterAccount Oy, an accounting firm in Levi.
Rate: accommodation services are taxed at the reduced rate of 13.5% from 1 January 2026 (previously 14%). The general rate is 25.5%.
When VAT applies: letting a property short-term doesn't automatically make it subject to VAT. What counts is the nature and circumstances of the activity as a whole. Letting can be treated as VAT-taxable accommodation when it has the characteristics of a business providing accommodation services, but the length of each stay isn't decisive on its own. Your own use of the property is usually the biggest question for VAT registration, so even a few days of private use can matter.
Registration threshold: €20,000 annual turnover for businesses established in Finland. Foreign businesses without a fixed establishment in Finland can't use this threshold, so they generally need to register from the first euro of sales.
Input VAT: a VAT-registered accommodation business can generally deduct the VAT on related costs, including construction and renovation. Reclaiming VAT on construction can improve cash flow early on, but it isn't available in every case. The property must stay in stable, VAT-taxable business use: under the 10-year adjustment rule for property investments, a change of use or a sale within ten years can mean paying back part of the VAT deducted. Get advice on your structure before you buy, build or renovate.
Income tax for non-resident owners
Rental income from a Finnish property is taxable in Finland, including for owners who live abroad. For individuals it's taxed as capital income: 30% on the first €30,000 a year and 34% above that. Company owners are taxed under corporate rules. Your home country may also tax the income, with relief under a tax treaty.
Owning as an individual or through a company
You can invest in a Levi holiday home as a private individual, through a Finnish company or through a foreign company. Each route is treated differently for income tax, VAT and deductions, and when you sell. The right structure depends on where you live, how much you'll use the property yourself and whether you'll let it as a business, so get advice on it before you buy.
Housing-company rules
If you own shares in a housing company (asunto-osakeyhtiö), check its articles of association and ask the property manager (isännöitsijä) whether short-term letting is allowed, and on what conditions. Some housing companies restrict it or require notice.
Fire safety and guest safety
At a minimum, a let property needs working smoke alarms, clear escape routes and suitable fire-safety equipment. Accommodation businesses have extra duties under the Rescue Act, including a rescue plan, and must notify the local rescue authority (in Levi, Lapin pelastuslaitos) before they start. Sleeping rooms, especially lofts, need safe escape routes such as escape-size windows.
Municipal and building rules
Check with Kittilä building control whether the building's permitted use allows short-term letting, and whether a notification is needed. Get answers in writing for your property.
Guest registration
Accommodation businesses must keep a register of their guests. Each guest completes a traveller's notification (matkustajailmoitus), and foreign guests also give their nationality and passport or ID card details. Booking platforms and property management systems can collect these for you.
Sources: Vero: VAT · Vero: rental income · Accommodation and Food Service Act (308/2006) · Rescue Act (379/2011) · Lapin pelastuslaitos · vatcalc: Finland cuts reduced VAT to 13.5%
Planning to let a Levi home? We get written answers from the authorities, and our accountant partners confirm what applies to you.
Talk to usFrequently asked questions
What is the VAT rate on holiday rentals in Finland?
From 1 January 2026, accommodation services in Finland are taxed at a reduced VAT rate of 13.5%, down from 14%. VAT only applies when letting is a business activity above the registration threshold, or for foreign businesses that must register. An accountant can confirm your position.
Do I need to register for VAT to rent out my cabin in Finland?
Finnish businesses providing accommodation must register once annual turnover exceeds €20,000. Foreign businesses without a fixed establishment in Finland can't use the threshold and generally need to register from the first euro. Short-term letting doesn't automatically make you VAT-liable: it depends on the activity as a whole, and your own use of the property matters most, so check your specific case.
Do non-residents pay tax on Finnish rental income?
Yes. Rental income from property in Finland is taxable in Finland, even if the owner lives abroad. Individuals pay capital income tax at 30% on the first €30,000 a year and 34% above that. Your home country may also tax it, with relief under a tax treaty.
Do I need a licence to rent out a holiday home in Levi?
There's no general short-term rental licence in Finland. You should check the building's permitted use with Kittilä building control, notify the rescue authority if you run it as an accommodation business, meet fire-safety requirements, follow any housing-company rules, and register for VAT and tax where required.
What fire-safety equipment does a rental cabin in Finland need?
At a minimum, working smoke alarms, clear escape routes and suitable fire extinguishing equipment, such as a fire blanket or extinguisher. Lofts and bedrooms need safe escape routes, such as escape-size windows. Accommodation businesses also need a rescue plan and must notify the rescue authority.