Land acquisition

Espoo is rapidly growing, and, in principle, the city is always interested in acquiring land in its area for different purposes. The city acquires land for projects such as recreational areas and future construction. Land is acquired primarily through voluntary acquisition.

The sale of land to the city is more advantageous in terms of taxes, as 80% of the sales price can be used as a deemed acquisition cost (Income Tax Act, Section 49). Therefore, only 20% of the sales price is taxable capital gains.

The Real Estate Department is responsible for land acquisition. If you are selling land in Espoo, please do not hesitate to contact us!

For detailed plan areas, the city has a legal right and obligation to acquire public areas and plots for public buildings (Land Use and Building Act, Section 96). Public areas include streets, parks and parking areas, while public buildings include schools and day-care centres. The initiative for land acquisition can come from either the landowner or the city.

The municipality acquires ownership of the areas designated as streets in the town plan through cadastral procedures (Land Use and Building Act, Section 94) after the first local detailed plan for each area enters into force. The landowner may be entitled to compensation for street areas (Land Use and Building Act, Section 104) if the area to be transferred is large.

Creating a plot or a public area by parcelling requires that this entire land belong to the same landowner. The city seeks to acquire the land areas in question primarily through voluntary acquisition. If a voluntary acquisition is unsuccessful, the city may have to resort to the redemption of a public area (Land Use and Building Act, Section 96) or an area included in plot (Real Estate Formation Act, Section 62).

Other redemption issues include conflicts related to street area compensation (Land Use and Building Act, Section 104 and 108) and redemption due to public necessity (Land Use and Building Act, Section 99). The redemption of an area included in a plot is often done when the plot is parcelled out. Redemption proceedings according to the Land Use and Building Act are performed by the National Land Survey of Finland.

The cadastral officers of the redemption proceedings include a cadastral surveyor as well as two trustees selected by Espoo City Council. Each have one vote in decision-making. Compensation is awarded primarily ex officio, meaning that it is not necessary to make a claim in order to obtain compensation.

The city may use its right in accordance with the Pre-emption Act to claim a sold property if the sold area of land is over 3,000m2. The decision for using the right of pre-emption is made by the City Board.

When the city does not use its right of pre-emption, the buyer will be informed of this at the request of the customer after receiving the property transfer declaration. The property transfer declaration is submitted to the city by a notary public.

At the request of the landowner, the city can provide a preliminary opinion that it will not use its right of pre-emption, given that the property is sold on the stated terms within two years of the city's decision on the preliminary opinion. The city however is not obligated to provide a preliminary opinion.

The written request for a preliminary opinion must be accompanied by a draft deed, stating the object of purchase, the purchase price and the other terms of the purchase. A preliminary opinion costs EUR 250.