Like all other northern European countries, Finland has a high cost of living. However, its reputation for high prices is not entirely deserved, as rents and utilities are lower than Sweden, Denmark, the UK and France. Groceries, eating out and alcohol are very expensive, which inevitably bumps up living costs. Helsinki is the priciest area but costs are lower in other major cities, such as Tampere and Turku and in rural areas. Despite high living costs and heavy taxation (income tax contributions are around 35%), Finns enjoy an excellent standard of living comprising free education at all levels and top quality healthcare and public services.
Finland is a nation of homeowners and the rental market is small and competitive, particularly in Helsinki. There are no restrictions on foreigners buying property and the process is straightforward compared to other European countries, although costly property taxes can ramp up prices. Accommodation varies from apartment living in cities to houses and villas in the suburbs and rural areas. Most buildings are modern and fitted with saunas and state-of-the-art heating systems. For those looking to rent, the choice is limited to apartments (rented houses are rare). In such a competitive market, it’s definitely worth enlisting the services of a letting agent to help you with your search.
Almost all Finnish tenancy agreements are fixed term and require the new occupant to pay up to three month’s rent as a security deposit. This is returned after inspection by the landlord or rental agency on leaving the property.
A tax of up to 4% is levied on the purchase of homes in Finland, according to the value of the property. Both homeowners and tenants also pay a municipal tax, however this tends to be minimal, as local authorities meet the funding demands of their areas through income tax. Municipal taxes are means-tested according to income.
Finns use a lot of electricity to heat their homes during the freezing winters (use of gas for heating or cooking is less common) yet utility prices are lower than some Western nations. The market was recently opened up, bringing prices down even further. There is a wide variety of suppliers, the largest being Helsingin, E.ON and Vattenfall. Water costs are usually included in the monthly rent. Finland is world-leading in digital technology and communications and offers an excellent broadband and mobile network in even the most remote areas at competitive prices.
The basic cost of utilities (gas, electricity, water and refuse) in an 85m² apartment in Helsinki is around €104 (£90) per month, with a combined broadband and phone package costing around €25 (£21) per month.
The Finnish TV licence was scrapped in 2013 in favour of a means-tested ‘broadcasting tax’ on income. This contribution funds the Finnish Broadcasting Company (YLE). The tax is capped at €140 (£117) per year and those on a low income are exempt. There are a range of digital and Pay TV services which offer programming in English, as do the main Finnish channels.
Healthcare and medical costs
Finland has an excellent universal healthcare system which is publicly funded through a national health insurance scheme (NHI). Healthcare provision is de-centralised, with each municipality responsible for providing primary, secondary and tertiary services in their area. Although health services are free there are some point-of-entry costs or ‘patient fees’ that all residents must pay on using the health service. For example, a visit to a GP can cost up to €20 (£17) but this can only be charged three times in one year, any visits thereafter are free. To be eligible for free healthcare in Finland you must be an EU/EEA national or a permanent resident in the country. Therefore, it is advisable for non-EU visitors to take out a private health insurance policy until their residence status is secure.
There is a large range of shopping options in Finland, from department stores such as Stockmann, Sokos and Clas Ohlson (homewares) in cities to more traditional markets and shops selling fresh produce and unique craft items.
Food is expensive but you can cut costs by shopping at supermarkets, which range from small convenience stores to hypermarkets, the dominating chains being Kesko and S-Group. Most supermarkets are open until 9pm on weekdays. Shoppers should be aware that supermarkets only sell alcohol of up to 4.7% strength (so mostly beer) and all other alcoholic drinks are sold by state-monopoly off licence chain Alko (LINK http://www.alko.fi/en/), which can be found all over Finland.
Finnish sales tax, or VAT, is currently set at 24% for most goods and services, with reduced rates on food and educational materials.
- Rent 1-bedroom apartment in city centre – €736 (£632)
- Rent 1-bedroom apartment outside city centre – €573 (£492)
- Price of apartment per square metre in city centre – €4,429 (£3,803)
- Price of apartment per square metre outside city centre – €2,677 (£2,298)
- Loaf of bread – €1.78 (£1.53)
- Milk (1 litre) – €0.93 (£0.80)
- Bottled water (1.5 litre) – €1.36 (£1.17)
- Draught beer (0.5 litre) – €2.39 (£2.05)
- Packet of cigarettes – €6.00 (£5.15)
- Petrol (1 litre) – €1.44 (£1.24)
- Cinema ticket – €12.50 (£10.73)
Source: www.numbeo.com (accessed July 2016)
Budgeting and saving
One way to burn through money while living in Finland is to eat out or drink in pubs and bars. Restaurant meals and alcohol are very expensive, especially in Helsinki. The best way to save is to entertain at home and shop in discount supermarkets such as Lidl, Sale, Alepa and K Market. Another food budgeting tip is to shop in supermarkets at night, when many items have been reduced in price.