Finnish Tax Deduction for Renovations — Save Up to €3,200
The kotitalousvähennys (household deduction) lets you deduct 35% of renovation labour costs. A complete guide for expats and homeowners in Finland.
The kotitalousvähennys (household tax deduction) is one of the most effective ways to save on renovation costs in Finland. In 2026, you can deduct 35% of labour costs for renovation work, up to €1,600 per person per year (€3,200 for couples).
This is especially valuable information for English-speaking expats living in Finland — many are not aware this deduction exists or how to claim it.
- Quick Summary — Tax Deduction 2026:
- Deduction rate (work purchased from a company): 35% of labour portion
- Maximum: €1,600/person/year (€3,200 for couples)
- Special rule for oil heating replacement: 60%, max €3,500/person
- Deductible: €150/person/tax year
- Eligible work: Repair, maintenance, and installation in your home or holiday home
- Not eligible: New construction, materials, design fees
- Payment: Must be bank transfer or card (no cash!)
- Receipts: Keep invoices for 6 years
What Is Kotitalousvähennys?
Kotitalousvähennys is a tax credit available to anyone who pays taxes in Finland. It applies to household, care, and renovation work performed in your primary residence or holiday home. The purpose is to reduce the grey economy and encourage the use of professional services.
The deduction works as a tax credit — it directly reduces your tax liability. If you paid taxes in 2026, you receive the benefit in your next tax return (filed spring 2027).
- Important for expats: You must pay Finnish taxes to benefit. If you have a Finnish personal identity code (henkilötunnus) and earn taxable income in Finland, you qualify.
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What Work Qualifies?
- Eligible renovations:
- Kitchen renovation (cabinet installation, countertop replacement, plumbing)
- Bathroom renovation (tiling, waterproofing, fixtures)
- Floor installation (parquet, laminate, vinyl)
- Wall painting and wallpapering
- Electrical work (outlets, lighting, panel upgrades)
- Plumbing work (faucets, drains, toilet installation)
- Sauna renovation (panelling, benches, heater)
- Small renovations (shelves, curtain rods, minor fixes)
- Not eligible:
- New construction (e.g., building an extension or garage)
- Materials and supplies (paint, flooring, tiles, fixtures)
- Design and planning fees (architect, interior designer)
- Major modifications in rental apartments without landlord approval
Calculation Examples
Example 1: Kitchen Renovation €15,000 - Total cost: €15,000 - Labour portion: €6,000 - Materials: €9,000 - Calculated deduction: 35% × €6,000 − €150 (deductible) ≈ €1,950 - Maximum per person: €1,600 → Actual tax credit: €1,600
Example 2: Small Renovations €2,000 - Total cost: €2,000 - Labour portion (70%): €1,400 - Deductible labour: €1,400 − €150 = €1,250 - Tax credit: 35% × €1,250 ≈ €440
Example 3: Couple's Floor Renovation €12,000 - Labour portion (50%): €6,000 - Labour per person: €3,000 - Deduction per person: 35% × €3,000 − €150 = €900 - Total for couple: €900 × 2 = €1,800
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How to Claim the Deduction
Option 1: Automatic (easiest) If your service provider (e.g., Kevyt Remppa) reports the work to the Finnish Tax Administration, the deduction appears automatically on your pre-filled tax return. Simply verify and approve.
- Requirements:
- Payment by bank transfer or card (no cash!)
- Service provider has reported to Tax Administration
- Company's business ID (Y-tunnus) visible on invoice
Option 2: Manual claim If the provider does not report, you can claim yourself: 1. Log into OmaVero 2. Select the 2026 tax return (filed spring 2027) 3. Find "Kotitalousvähennys" section 4. Enter provider name, business ID, work description, date, price, payment method 5. Upload invoice as attachment
- Keep receipts for 6 years — the Tax Administration may request verification.
Tips to Maximise Your Deduction
- Spread work across years — If renovations exceed the cap, split them across two tax years
- Both partners claim — Couples can claim separately, totalling €3,200/year
- Always pay electronically — Cash payments do not qualify
- Ask for itemised invoices — Labour and materials must be clearly separated
- Choose providers who report automatically — Kevyt Remppa reports all work to the Tax Administration
- Keep invoices for 6 years — Tax Administration can request proof at any time
Frequently Asked Questions
Can I claim the deduction in a rental apartment? Yes, but only for ordinary maintenance work (faucet replacement, painting, small fixes). Major renovations in rental apartments require landlord permission.
Can I deduct material costs? No. Only the labour portion qualifies. Ensure your invoice clearly separates labour and materials.
Does the deduction apply to holiday homes? Yes. Work on your holiday home (mökki) also qualifies. The same annual maximum applies across all properties combined.
When do I receive the tax refund? The deduction reduces your tax liability in the following year's return. If you overpaid taxes, you typically receive the refund in July–August 2027 (for 2026 work).
Can pensioners use the deduction? Yes, if you pay taxes. The deduction reduces your tax liability, so the benefit depends on your annual taxes.
Petri Lindfors
Renovation expert
Petri Lindfors is Kevyt Remppa's renovation expert. He has planned and executed hundreds of bathroom, kitchen and apartment renovations over 30 years. Petri's strength is combining a realistic cost estimate, a workable schedule and practical solutions so your renovation proceeds smoothly from start to finish without unnecessary stress.
