Phenomena of
second homes in
Finland
Case of South Savo and Mäntyharju
University Of Eastern Finland, Joensuu, Finland
Ronny Giambelluca, Chloe Julien, Barun Khanal, Szabina
Laskai, Katerina Pavlikova, Petr Piekar, Ekaterina Bulakh,
Henna Malinen, Caleb Ofosu Oppong
Contents
1.
Introduction.......................................................................................................................................3
2.
Mobility and lifestyle migration ......................................................................................................4
2.1.
Freetime and time use characteristics in Finland .............................................................. 4
2.2.
Loneliness and free-time dwellings ..................................................................................... 6
Second homes and mobility..............................................................................................................8
3.
3.1.
Motives for second homes mobility ..................................................................................... 8
3.2.
Patterns of second home mobility ....................................................................................... 8
Impacts of second homes development ...........................................................................................9
4.
4.1.
Economic impacts ............................................................................................................... 10
4.2.
Social impacts ..................................................................................................................... 12
4.3.
Environmental impacts ...................................................................................................... 13
4.4.
Second home trends in the South Savo and Mäntyharju areas ..................................... 14
4.6 Trend of second home mobility in student´s home countries .............................................. 15
5
Second homes, legislation and rural development .............................................................. 15
5.1
Real estate legislation and second home ownership ........................................................ 16
5.2
Real Estate Legislation ....................................................................................................... 16
5.3
Environmental legislation .................................................................................................. 17
5.4
Taxes .................................................................................................................................... 18
5.5
Legislation Development .................................................................................................... 18
5.6
EU Regulations ................................................................................................................... 19
6
Conclusion............................................................................................................................... 20
1. Introduction
This paper has been written as a part of NordPlus program which is held in Estonia in May 2014.
NordPlus program is focusing on invisible people and also on the phenomena of second home mobility.
Our international group worked with the Finnish region of South-Savo.The paper theoretically explains
preconditions of second home mobility, concretely describes second home trends in South-Savo region
and Mäntyharju town and also focuses on real estate legislation. Moreoevr, we have added the trends of
second home mobility in student´s home countries.
The definitions of second home and tourism are still controversial and have many versions in
different countries. We can describe second homes as the object of the phenomenon of dwelling for
recreational and secondary purposes that are owned or only utilized by the dwellers. It is not a distinct
type of accommodation but includes for example cottages, vacation homes, farm houses and sometimes
even caravans or boats. (MARJAVAARA, 2008, 7). Today’s second homes are not at lower level than the
first home in the dwelling hierarchy (spending more time and more frequently). Dwellings are not so
important like in the case of permanent homes (secondary use, recreational purposes) which results in
no or low economic significance to society, so places where second homes are dominant in numbers
might have some problems (it has lower value by being labelled as a “detached and non-mobile,
privately owned, single family dwellings for recreational and secondary use” (Marjavaara, 2008, 8).
“When work increasingly intrudes to urban people’s homes, rest and peace are sought from
elsewhere, especially from the countryside. In the country people can slow down and relax away from
the haste. Already thinking of the cottage relaxes me, writes a middle-aged woman. The spiritual home
of my soul is located in the cottage garden, describes an elderly lady. For both of them, second home is
a romantic dream come true. It is a promise of a simple life close to nature. Their second homes
represent stability and are preserved from one generation to the other. For long, it was believed that
once Finland becomes urbanised second homes gradually loose their importance. So far, this has not
happened” (HS, 12 July 2006). Marjavaara (2008) also referred to the definition provided by ASTRID
as “detached and non-mobile, privately owned, single family dwellings for recreational and secondary
use”. (Astrid 2002 in Marjavaara 2008). In simple terms a second home is an accommodation that is
used normally used for holiday vacations. They are normally small houses or cottages which holiday
makers buy and use it during their stay. Second home are used for various reasons, many rural areas are
attractive to owners of second home. Some people need them for space, land prices, proximity to
leisure activities or social links to the area.
The first chapter is focused on motives for second home mobility and also to patterns of second home
mobility. And we also cover second home mobility in case of Finland.
2. Mobility and lifestyle migration
The concept of mobility is found to be more prominent in cultural geographies of migration (Blunt,
2007) in home and family life for domestic and migrant workers. Hannam et al. (2006, pp. 9–10)
describes mobility as a field that spans ”studies of corporeal movement, transportation and
communications infrastructures, capitalist spatial restructuring, migration and immigration, citizenship
and transnationalism, and tourism and travel”. As the trend of "the new mobilities paradigm" proposed
by Sheller and Urry (2006) suggests, mobile travel allows one new mode for retirees, who are able to
do full-time mobility by recreational vehicles, to actively engage in new styles of retirement life. New
mobilities paradigm informs work on forms and spaces of mobility ranging from driving on roads to
flying and airports.
Benson and O´Reilly (2009a, pp. 609) asssociated ”lifestyle migration” as a common, growing,
poorly understood phenomenon where people decide to migrate to new place with an expectation of
better life than what it is in their current place. The decision for better life comes with the idea of living
in better situation and searching fulfilling life after migration. This kind of movement can be for short
time (eg. leisure) or long time (eg. migration), part-time (eg. old-age) of full-time, for different reasons,
but for a better quality of life. Benson and O´Reilly (2009a, pp. 609) also argues that even though the
phenomenon of moving for a better way of life has also been researched under study related to
retirement migration, leisure migration, counterurbanisation, second home ownership, amenity-seeking
and seasonal migration, these common lifestyle circumstances however can be studied under single
phenomena of lifestyle migration.
2.1.
Freetime and time use characteristics in Finland
Generally, phenomenon of second home ownerships is very traditional in Nordic countries and we
can say that this phenomenon is a part of Northern culture. Lithander et al. (2012) mention that second
houses are used on average 75 days in Finland, 71 days in Sweden and 47 days in Norway per year. If
we focus on the second houses in Finland, we can say, that Finnish rural second homes are most
commonly wooden cottages located in the countryside in area of woods (Periäinen 2006). According to
Official Statistics of Finland, by the end of 2012 there were 5.3 million dwellers in Finland and
496,200 statistically counted second homes. It is estimated that 800,000 Finns belong to cottage owner
household and around three million of Fins have access to second home house through relatives and
friends (OSF 2012). If we speak about location of Finnish second houses, most second houses are
located outside rural community. So the landscape is characterized by spread distribution of cottages
which do not for clear settlement structure. Only 14% of cottages are located in rural villages. The
most part of cottages are usually spread in forests and around lakes (Vepsäläinen and Rehunen 2010).
According to data available in Statistics of Finland, free time is the amount of time in a day that
remains after time spent on sleep, meals, washing and dressing, gainful employment and domestic
work, as well as on studying has been deducted. As we can see in the figure 1 below, percentage of
time Finns spend to travel related to free time has not changed over 30 years period (1979-2009). This
can be because of Finns willingness to spend time in going far from their current home. Like in most
Nordic region, Finns free time use is more home-centred in winter than in summer. Another report
published in 2011 explained that time use among Finns have changes through the 2000s, as the amount
of free time has grown by one hour per week over the 2000s.
Percentage
Time Use in autumn 1979, 1987 1999 and 2009
160
140
120
100
80
60
40
20
0
Free time, total
Travel related to free
time
1979
1987
1999
2009
Participated, %
Total
Travel related to free time
Figure. 1: Time use survey- time used by Finns for travelling related to free-time activities (Statistics
Finland, 2011)
In his research with interviews with seasonal migrants’ retirees residing in Sweden and Spain,
Gustafson (2001) looked into experiences of transnational mobility and multiple place attachment.
Gustafson (2001) indicates that respondents regard themselves as temporary visitors in one country;
adapt to local habits, enjoy cultural difference, and, to some extent, make themselves at home in Spain
or in Sweden but practise “Swedish” way of life in both countries. The phenomena what Gustafson
refers to as “live two different lives”. Respondents in Gustaffson’ study also informed that life in two
countries to be a “highly positive experience and contribute substantially to their perceived quality of
life”. This kind of migration as a motive towards sensitivity towards quality of life refers to what
Benson and O´Reilly (2009a) referred to as ”lifestyle migration”.
According to a report published by Statistics Finland (SF, 2011), basic characteristics of people's
time use in Finland have remained quite unchanged over three decades. However, the amount of free
time for Finnish people increased in Finland in 2009 as the time spent on paid employment drop off
due to the economic recession, as pointed out by preliminary data concerning in the autumn of 2009
(SF, 2011). Free time and unemployment often leads to possibility to migration as a way to seek change
in lifestyle. As Benson & O'reilly (2009b), referring to other past research, specified that people quest
for better way of life against present negative perception of life, and as migration is way to either
“getting out of trap”, “make a fresh start”, or “a new beginning” before migration. In the stories told by
migrants, the book by Benson and O´Reilly (2009a) portrays narrative of migration for escape from
monotonous routine life, from individualism or materialism lifestyle, life-experiences involving risk or
shame, uncertaininty of economic future, isolated retirement, and thus finding migration as a way to get
away from negative lifestyle towards meaningful way of life.
2.2.
Loneliness and free-time dwellings
Another reason for people willing to build houses in remote place can also because of Finns
characteristics of fondness to be alone. A recent report published by SF indicates that Finns spend more
time alone and being alone has increased over the past ten years (SF, 2009). The increase in being alone
is visible for both women and men and in all age groups; however the willingness to be alone seems to
be more prominent in men than with women and proportionally increases with the age.
Figure 2: Indices of owner-occupied housing prices 2010-(first quarter) 2013
According to Statistics Finland, the highest numbers of new free-time residences were built in
Etelä-Savo and Lapland in 2011, and the municipality with the highest number of free-time residences
was Parainen. However, after the municipalities were merged in the beginning of 2013, the biggest
municipalities in terms of number of free-time residences after the municipalities were Mikkeli and
Kuopio ( SF, 2012).
There were 496,208 free-time residences at the end of 2012. The practice of building free-time
residences was a big boom in 1980s as the number of free-time residences almost doubled to 251,744
in 1980 as compared to 176,104 in 1970. Contrasted to that ratio, the latest tradition of building houses
for free-time purpose seems to be only 496,208 in 2012 compared to 474,277 in 2005. However, in a
report published by OSF, the numbers of free-time dwellers in past when evaluated to new free-time
residents indicates that New free-time residences are on average larger than older free-time residences
(SF, 2012). This indicates that even though the ratio of building free-time residents has not been
increasing, on average, there are more number of new people interested in free-time dwellings.
As shown in figure 2, another interesting statistics shows that even though the annual costs of
owner-occupied housing rose by 0.6 per cent in the fourth quarter of 2013, purchases of dwellings still
increased by 0.6 % during the corresponding period. (SF, 2014). Increase in the cost for maintaining
housing does not decrease number of new house dwellers.
3. Second homes and mobility
It is controversial that second homes are real part of tourism sector. It has not been labelled as
tourists from the beginning, but second homeowners are kind of “permanent tourists”, “characterized
by permanent periodic travel between the two dwellings, marked by routine” (Marjavaara, 2008, 9).
They can be “new-residents” due to their residence for a long time in their second homes without being
officially registered as residents. They are not seen as tourists in most of the cases. The reason is that
“second home tourists are not engaged in commercial processes, owning tourism businesses, tourism
associations, destination marketing authorities or appear to generate employment and hence, direct
economic effects.” (Marjavaara, 2008, 9-10). This is rarely shown in official statistics on tourism. They
cannot be avoided in tourism because they have important role in domestic tourism like in Finland. In
general, this kind of tourism is often ignored by officials, the industry and planners, despite the fact that
second home tourism has essential effects on other sectors, which are centrally viewed in development
policies. In other words, impacts of second home tourism should not be neglected for the successful
development. In Finland, detached houses as unoccupied dwellings by officials are often second
homes. The continuous growth of cities brings environmental and health problems. Urban lifestyle is
characterized by stress and speed, people want to spend time outside of the city.
3.1.
Motives for second homes mobility
Vepsäläinen and Pitkänen (2010) refer to Wolfe (1977) and Jaakson (1986) who point out key
motives for second home holidays. These key motives are listed as key motives in Finland and also
worldwide. These factors are: Connection to wild nature, counter-balance to urban life, family
togetherness and the possibility to engage in various nature-based activities. Vepsäläinen and Pitkänen
(2010) revealing three different aspects of rurality that the second home culture relies on:
1. The second home landscape is seen as wilderness
2. Life there imitates visions of traditional rural life
3. The environment is used for traditional consumptive and leisure activities.
3.2.
Patterns of second home mobility
Generally, second home tourism is a part of wider human mobility phenomena. Key concepts of human
mobility are time and space (Hall 2005). Hall (2005) works with these concepts of time and space and
adds the third dimension, the number of trips. “Second home tourism is strongly affected by time and
space (Kauppila 2010, 164). I we are speaking about time and space, second home tourism is more
intra-regional form of mobility than inter-regional. So the distance of second homes plays import role
in mobility (Hall, 2005).
Hiltunen and Rehunen (2014) argue that second home tourism related spatial mobility patterns and
travel flows are dependent on many geographical factors and processes. They also refered to Müller
(2006) and Hall and Müller (2004b) who mention that classic geographical distance decay effect
influencing regional patterns of second home tourism. Hiltunen and Rehunen (2014) also refer to Pirie
(2009) who mention that second homes are mainly concentrated in the hinterlands of population centres
and many second homes are located close to homes of owners. But increasing human mobility,
especially due to improvements in transport technology makes distance relative and relational.
Different scholars point out several factors which influent second home patterns. For example Muller
(2006) note that second home spatial patterns are influenced by population distribution and change,
industrialization and urbanisation and also by primary economic determinants as space time
accessibility, income level and real estate costs. Hiltunen and Rehunen (2014) point out that
phenomenon of second home tourism and related mobility is in constant change and also influenced by
the elements and processes of surrounding bio-physical and socio-cultural environments.
Accordingly, cultural or spatial interaction between two places declines as the distance in between
increases (Pirie, 2009). Second homes mainly concentrate in the amenity rich hinterlands of population
centres and majority of second home owners live close to their second homes.” (Hiltunen and Rehunen
2014)
4. Impacts of second homes development
It is important to realize to what extent and in what ways could second home influences countryside
in positive or negative way. That’s why we decided to put three main spheres of impacts – economic,
environmental and socio-cultural. In this chapter the development trends in the South Savo and
Mäntyharju case study area will be explored against the background of areal impacts of the second
home tourism. In a study of the second home tourism in Sweden, Marjavaara (2008, 12) divides the
impacts of the phenomena into three main types: economic, environmental and socio-cultural impacts.
First some of the impacts likely to concern the case study area will be named following this division
and connected to the situation in Finland. After which the current trends and development plans applied
in the area will be shortly described in order to highlight the significance of the impacts in South Savo
and Mäntyharju.
4.1.
Economic impacts
During the restructuring of the rural economy “local population was becoming more dependent on
the incomes generated by the summer guests (tourists) rather than the decreasing incomes from
traditional sectors such as agriculture and fishing” (Marjavaara 2008, 12). “At the local level, second
homes provide a flow of money into the importing region, through the initial purchase price of the
property, spending on renovation and improvements, increased tax incomes and spending on food,
leisure and other services.” (Brida, Osti, Santifaller 2011) There is possibility for local residents or
second homes owners to rent their properties as another source of financial income. Second home
tourism can also bring some new job opportunities. It could be also chance for small entrepreneurs or
farmers who sell local products. Usually local residents cannot afford this goods, but tourists are in
many cases able to give higher price for products (Marjavaara 2008). Second home development could
cause negative consequences for a residents or potential residents because of increasing prices of
property, local goods or services mostly in attractive areas. Also provision of additional infrastructure
and services, for example garbage collection or water supply, might increase. (Brida, Osti, Santifaller
2011) Other areas of extensive economic impact are the construction, real estate and finance sectors
and knowledge transfer.
Second homes in Finland are typically sparsely distributed in the rural landscape. Partially due to
lenient legislation the building of shores has not always been tightly regulated (Hiltunen & Rehunen
2014,6). In rural areas, permanent residents are spatially more restricted in their choice of shopping
outlets. Second home tourism serves as a vital injection for the basic services, which depend on the
distance between the second home and the permanent home (increasing distances reduces the local
spending by the second home owners due to limited transportation capacities).
Figure 3 The average distances from
permanent residence municipality to second
homes location according to Rehunen and
Hiltunen (2014, 9).
Figure 4 The travel flows of second home
tourism in Finland as presented by Rehunen
and Hiltunen (2014, 11).
On figure 3 the average direct distances between second homes and permanent residences are
shown as presented by Rehunen and Hiltunen (2014, p. 9). We can see in South Savo distances might
be between 2 and 60 km, which cause less spending than further places. This is due the closeness to
Helsinki. Figure 4 is about about the main direction for second home tourism from Helsinki. This
represents the significance of the Lake District, especially South Savo that is the second largest region
in number of second homes. South Savo was dependent on its summer visitors from all parts of Finland
to keep its “lake country” viable (Rehunen and Hiltunen, p. 11). South Savo, with a large proportion of
its area taken by lakes and forests had a few urban centers in the region, but these were poorly
connected; connections to urban centers in Southern Finland were of more significance. Its natural
beauty and branding as an “eco-province” attracted tourists and second homeowners in the summer.
The number of Russian second homeowners continues to grow which results more
positive economic effects (Lipkina & Hall, 2013, 164). According to Leppänen (2003 quoted
in Marjavaara 2008, 14-15), “second home owners potentially create a centre of competence
for rural areas, meaning that these individuals often represent firms that can be of use for
firms and businesses in the local destination by sharing their knowledge and creating
business opportunities.” In some municipalities in rural Finland, official meetings are held
between second homeowners with their own businesses and representatives for local firms to
be competitive and more innovative.
4.2.
Social impacts
Social impacts of second homes development are in many cases connected with conflicts
of interests or opinions of locals and second home owners/ tourists. For example locals are
more open to changes which could mean economic development of a locality, second home
owners have an idea of preserving countryside and nature around. (Müller, 2002). Quite
frequent phenomenon are clashes between locals and tourists which may occur because of
different nationality, values, traditions or lifestyle. Second homeowners are often seen as
representatives of urban lifestyles and urban values e.g.“alien values”, “fake or not natural
culture” in contrast of permanent population e.g. on the islands of Åland the case of
“shameless recreationists”. Lack of communication between those two communities could be
also problematic. Second home owners, mostly from urban areas, may contribute with some
know-how or useful information and can help somehow with sustaining the locality.
More then a half of Finns rather not had any contact with a Russian houseowners, “51 per
cent of locals and 61 per cent of cottage owners” (Lipkina & Hall, 2008). Differences in
values and lifestyles cause lack of interaction e.g second homeowners strengthen the spatial
segregation, which might have historical, racial and ethnic dimensions as well as distrust.
Despite that most of them think that good relations with Russians are important. They
represent other socio-economic status. Russians spend more and more money, which has
negative effects on e.g environment (“buying more resources”) as well as more influence on
decisions in development, etc. Thise has boosted misunderstandings and conflicts. One of the
hottesr debates is “the demand for second homes causes a displacement of permanent
residents in attractive second home destinations” (Marjavaara, 2008, p. 20).
4.3.
Environmental impacts
According to Breuer (2005) there are negative environmental impacts mainly in peak
season because of increasing flow of people, it influences water supply, the sewage system,
causes pollution. Without good planning and application of sustainable solutions it could
cause significant problems. In the paper we are talking mostly about community, but it has
also negative influences when people travel from their hometown to second home destination.
The positive thing is, that owners of second homes are often closely connected to the nature
and their house or cottage, therefore they maintain surroundings and avoid doing harm to the
environment. Another positive aspect could be in reusing of abandoned houses and giving
them new usage instead of being demolished or left to decay (Brida, Osti, Santifaller, 2011).
High densities of second homes can potentially increase environmental degradation and
competition between locals and second home owners for shared resources such as fishing and
fresh water. This might cause tensions between the two groups. High utilization rate of coastal
locations e.g. deteriorating water quality, erosion and decreasing public access, local flora,
animals, etc. The houses being located close to the coast have impacts as well. Infrastructure,
e.g. water trails, are used as a development factor in development processes, the water trail
network is still not effectively utilized in the tourism development.
According to Leppänen (2003 quoted in Marjavaara 2008, p. 17) in Finland, the
environmental impact of second home tourism, i.e. less than 1% of all local carbon dioxide
emissions, is moderate. This form of tourism has some negative impacts as ther sectors does,
this is regarded as minor problem e.g. energy and resource consumption of two homes.
Saimaa region is a tourist region, which consists of four administrative regions: South Karelia,
South Savo, North Karelia and North Savo. In total, there are 120000 private vacation homes
(2006). This is 25% of the national total (Savonlinnan Innovaatiokeskus, 2010, p. 3).
Construction of new vacation homes is very active (especially in Southern areas).
4.4.
Second home trends in the South Savo and Mäntyharju areas
The case study area is located in Eastern Finland and comprises of two spatially
overlaying administrative entities that each have legally binding duties among other interests
in regional development and local governance. South Savo region consists of 14
municipalities. The regional development plan, which contains the general guidelines for the
spatial distribution and extent of land reservations, is compiled by the Regional Council. The
area identifies as peripheral borderlands of the European Union (Regional Council of South
Savo, 2009, p. 6) and has the second most free time residences in Finland (Statistics Finland,
2013a).
In the regional plan of South Savo area free time residences are recognized as vital to the
wellbeing of the region (Regional Council of South Savo 2009, p. 6). It is also said that the
employment patterns in Eastern Finland are concentrated around the main cities and the main
road network (Regional Council of South Savo 2009, p. 6) which in South Savo case would
mainly be the regional center: Mikkeli and villages. This complies with the national trends of
decreasing population in the rural areas, the regional concentration of population and the
dispersion of population in urban areas. On the other hand: free time residences are not
typically concentrated in the Finnish tradition but built far apart from one another. According
to Hiltunen and Rehunen (2014, p. 7) “The Finns typically look for solitude surroundings for
rural second housing and cottages are traditionally built as far from neighbouring cottages as
possible.” This is further said to have led to dispersed location patterns of second homes in
Finland (Hiltunen & Rehunen 2014, p. 7). Shorelines are somewhat more concentrated areas
of second home building as waterfront plots are highly sought after. This may be one of the
best selling points of South Savo region as it has the largest shoreline to land area ratio in
Finland (Statistics Finland, 2013b).
Mäntyharju is a member municipality of the South Savo region and has close to 6300
inhabitants. Second homeowners are of particular importance to the area as there are more
free time residences in the municipality than permanent residences (Statistics Finland, 2014).
This is also recognized in concrete city planning and more abstract development objectives
such as the vision statement of the municipality where Mäntyharju is said to “create excellent
conditions for entrepreneurship, living and free time.” (Mäntyharju). The detailed plan of the
Kallavesi shore area is an example of an ongoing development plan in Mäntyharju. The plan
is to be approved in the beginning of 2015 after hearing the comments and notices of the
affected parties on the draft version (Municipality of Mäntyharju, 2012, p. 7). So far only the
general goals of the plan have been approved but the plan would seem to strengthen the
existing pattern of land ownership in Mäntyharju as most of the new building area would be
reserved for secondary dwellings (Municipality of Mäntyharju, 2013, p. 25).
Also the
development of tourism services is mentioned as a goal of the plan (Municipality of
Mäntyharju, 2013, p. 26).
In South Savo there are about half of the free time residences owned by people from
outside of the region (Regional council of South Savo, 2014, p. 4). In 2004 about 75 % of the
second homes in Mäntyharju had out-of-town owners and the amount of second home
vacationers was exceptionally high in comparison to the rest of the country (Saaristoasiain
neuvottelukunta 2006, p. 18). This means there is a vast population of part time inhabitants in
the area that have rights to for example get involved in the regional or areal planning and
utilize certain health, technical and cultural services, but do not pay the same taxes as the
permanent inhabitants (Saaristoasiain neuvottelukunta, 2006, 22, pp. 41-48).
The development of tourism services has been recognized in several development plans in
the case study area. In the South Savo regional program for the years 2014-2017 the
importance of second home tourism is evident. In general tourism is seen as an important
source of employment and income. The development goal defined in the program is to make
South Savo the leading region of free time residents (Regional Council of South Savo, 2014,
p. 4).
4.6 Trend of second home mobility in student´s home countries
The trend of second home mobility had grown in the Czech Republic during the 20th
century to the position of the cultural, economic and ecological phenomenon. This
phenomenon is also interesting from the sociological perspective and the Czechs are often
named as a nation of second home owners. Direct or indirect experience with their use has at
least half of the Czech population and second buildings account for 20% of the total of all
residential buildings. This phenomenon is very usual and famous, there are movies and serials
and also specific magazines about second home houses.
5 Second homes, legislation and rural development
In the past, second homes were perceived as negative change in countryside, rural
areas which suffered from crisis like decline in rural population, decrease farm labour, rural
poverty etc. were blamed to the development of second home phenomena (Muller, 2011a).
Rural areas itself go through lots of changes as technologies, modernisation, infrastructural
changes as well as the impacts of globalisation. Nowadays they are considered more as a
place of consumption and appreciated for its recreational and aesthetic values (Saarinen,
2004). These days conception of second homes is seen in a more positive way, predominantly
because of positive economic impacts, but also negative influences still play a significant role.
These negative changes are visible mainly in terms of environmental issues, therefore new
approaches in second homes development are implemented, mostly dealing with sustainable
way of tourism. It is hard to generalize that positive effects outbalances negative, because still
depends on local circumstances which varies from place to place.
5.1 Real estate legislation and second home ownership
The increase in urbanization and growth in wealth spread second-home ownership to new
social classes, primarily in urban areas. The result of this development was a large number of
purpose – built second homes in an attractive zone, larger cities (example: lake). There is a
number of important social changes that have also meant that there has been an increase in
national interest in second homes. This is where Finland, with its recurrent “cabin barometer
“comes in. The barometer includes a large amount of factual information about Finnish
second home (days of residence, distance work, community work, economic effect, level of
equipment, infrastructure, journey and environment aspects) (Swedish Agency for Growth
Policy Analysis, Rural housing. Systems and structures in Norway, Sweden and Finland).
5.2 Real Estate Legislation
In Finland, direct property ownership has to do with completely owning the land and the
buildings on it. The owner needs a permission from the region administration to cut down the
trees on his own land (Way to Finland).
There are two kinds of real estate companies in Finland: the ordinary real estate company
(REC) and mutual real estate company (MREC).
The ordinary real estate company (REC) is a limited liability company (it blends elements of
partnership and corporate structures formed into legal partnership with the Finnish companies
Act.
The mutual real estate company (MREC) is a limited liability company founded under
either the Finnish Housing companies or the Finnish companies Act.
A foreigner can easily buy a real estate through a mortgage. The process takes around two
weeks. The first thing to do is to contact local authorities and find out how the buildings on
the land can be used (ProFinland).
Most often you can procure about 75% mortgage on the value of the property with
negotiable repayment options.
Finland has chosen a method that uses state guarantees for owner-occupied housing,
which is tool with very simple administration. So, whoever buys a home or builds their own
house receives a state guarantee for their loan. It exist savings system for housing (BSP)
which is intended to support young people ahead to purchase of their first home or secondhome.
Foreigners can buy a real estate in Finland for temporary or permanent housing. To do
this, he has to get permission from the local Centre of environmental protection. This permit
is issued within three months after purchase or signing the contract of sale. Also, this paper
can be obtained beforehand.
5.3 Environmental legislation
“At national level, the Land Use and Building Act (5.2.1999/132) and the Land Use
Planning Decree (10.9.1999/895) are the key instruments governing second-home
development. They regulate the use of land and water areas and building activities, including
second homes. On the other hand, the formal National Land Use Guidelines control spatial
planning at a general level. An emphasis of these key national level documents is on building
issues in general, without specifying second homes, except in a few areas concerning
ecological values and the attractiveness of shore areas” (Janne Rinne, Riikka Paloniemi, Seija
Tuulentie & Asta Kietäväinen, 2014, p. 5).
Currently, the legislation on environmental protection and construction in Finland is
strict, especially on building on the shores. However, it has been not always tightly regulated.
(Findacha; Hiltunen & Rehunen 2014, p. 6)
Regional councils prepare regional plans at the most general level, however, in
practice, the municipal regional organisations are responsible for both regional policy
planning and for land use planning. Planning at a regional level includes a regional overview,
a regional plan that governs other area planning and a regional development programme.
Municipal planners and elected members of municipal counsels are mainly making
decisions concerning second homes. Anyone can participate in decision making if their
interest are affected by land plans. Second-home owners have to give formal statements and
make appeals about their plans on using the land (Janne Rinne, Riikka Paloniemi, Seija
Tuulentie & Asta Kietäväinen, 2014, p. 5).
5.4 Taxes
The buyer of a property in Finland is required to pay property tax on the property located
in Finland. The tax on property is calculated according to percentages that are set by the
municipality in which the property is located. The amount of transfer tax is four percent (4%)
of the price of the property when it’s a real estate and 1.6% of the price when it is the
purchase of shares.
Registration of real estate ownership in Finland will require some costs (Way to Finland).
The owner is obliged to pay annually the real estate tax, which currently stands at 0.50-1.0%,
as well as the real estate tax, which is used as a permanent dwelling-0.22-0.50% of the
cadastral value of the property (ProFinlad).
Right after the acquisition of the real estate in Finland the foreigner receives the
confirmation of ownership, so he just goes to the Consulate and gets a visa for a period of 1
year, where he can stay in the country up to 90 days every six months (Villa Suomi).
Foreign nationals are able to buy property in all areas of Finland excluding the province of
Ahvenanmaa, without any special permission (Inostrannik).
5.5
Legislation Development
During the soviet Era, it was illegal to own property, all the lands were communally
owned. However after the collapse of the Soviet Union it became legal to own property. This
has led to the phenomena of many Russian businessmen and other ordinary nationals
acquiring property including second homes in Finland.
There was a glut of business activity in the end of the last century. It had had a positive
impact on the real estate market. At that time, tenants and buyers were mostly interested in
real estates adjacent to Helsinki and Tampere, Oulu, Jyväskylä and Turku. The Sharp increase
in demand for real estate in these areas has resulted in considerably high price of rent in
Finland (ProFinland).
Russians are generally interested in accommodation in Imatra, Lappeenranta, Mikkeli,
Kuopio, Jyväskylä, Punkaharju and Savonlinna. Russians are watching carefully towards the
South of Finland. It is quite far away from Saint - Petersburg, moreover it is more expensive.
In the North of the country there is a very well - developed tourism. It is a home to Santa
Claus, and in winter, thousands of tourists come here from all around the world. This makes
Lapland very attractive for buying real estate for the purpose of eventual lease. In the middle
of Finland there are a lot of colleges and universities, and thus most of the real estate is sold
cheap counted upon students. It is estimated that, as of 2012, there were an estimated 50007000 properties in Finland which are owned by Russians.
5.6 EU Regulations
For professor Ole Reiter, there is a rural development processes that unite the Nordic
Countries. Indeed, until the 1970’s, the emphasis in municipal planning was on the expansion
of large scale housing projects and other infrastructure projects.
After Finland joined the EU in 1995, it had to make a few alterations to its laws concerning
European Union’s laws, by the year 2000 it had made all the necessary changes to conform to
the EU regulation on property ownership.
Article 56 of the Treaty establishing the European Community states that: “The free
movement of capital as a fundamental freedom enshrined in the Treaties means far more than
simple currency exchanges. The free movement of capital also includes the rights of citizens
and businesses to purchase shares in companies established in a different Member State, or to
purchase property such as a holiday home or secondary residence.. …………..It must be
stressed that the free movement of capital between Member States remains fully assured.”
Therefore it was necessary for Finland to adhere to this requirement and it did so by
making gradual changes until the year 2000 when it completed the changes.
In conclusion it can be stated that second home ownership still remains as a thriving business
venture and the phenomenon is going to increase steadily in the years ahead.
6
Conclusion
Finland second home tourism is today probably one of the most vital elements in the
development of rural areas.( (Marjavaara 2008). One of the key points is to define what the
second homes are, what the motives of people are and what influent patterns of second home
mobility. The decision for better life comes with the idea and search for living in better
situation and thought of fulfilling life after migration. So migrants move to new place short,
long time, old-age of full-time and for different reasons for a better quality of life. Second
home ownerships is a common phenomenon in Nordic countries and is even considered as a
part of Northern culture. In case of Finland, people still like to be spend time alone, they value
nature, and thus spend their free time out of their everyday-homes and tend to buy or as an
inheritance. People also move to new place to get away from monotonous routine life,
individualism lifestyle, life-experiences, and thus can also be a way to find migration as a way
to get away from negative lifestyle towards meaningful way of life. And it seems like
migrating to second homes being social, economic, environmental issues to the new home
location. However, people are still people and they might want to live in their known
surrounding and thus they bring new culture, way of living to the new place. There are
several factors which influent second home mobility and there is no doubt that these motives
vary worldwide. These impacts have major role in displacement discourse. Nature tourism
(concluding second home tourism) in the tourism development plan of the province of South
Savo (Mika Lehtolainen) aims to increase the profitability and number of tourism enterprises
regional income and the level of employment, and the amount of tourists and length of visitor
stay in the area (p. 1-2). Other goal is to double the jobs in the sector (Mika Lehtolainen). We
suggest it is necessary to perceive every locality as a unique. It is important to analyse
economic, social and environmental impacts of second home tourism with purpose to avoid or
reduce problematic aspects while emphasize and develop positive aspects. With smart
planning or certain programs could be second home tourism, the same as other forms of
tourism, sustainable and preserved for the future generations.
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