When does the deemed acquisition cost beat your actual cost basis?

The deemed acquisition cost, hankintameno-olettama, wins when it leaves a smaller taxable gain than your real purchase price does. Finland lets you subtract either your actual cost basis or a deemed cost: 20 percent of the sale price if you held the asset under 10 years, or 40 percent if you held it 10 years or more. You take whichever gives the lower gain.

How the comparison works

For every sale, HomeCFO computes the gain two ways. The actual method subtracts your real purchase price and eligible costs, such as brokerage fees. The deemed method ignores those and subtracts the flat 20 or 40 percent of the sale price instead. The method with the lower gain is the one that applies.

The deemed cost tends to win when an asset has grown a lot in value or when you no longer have clean records of the original purchase price. If you bought cheaply years ago, 40 percent of today’s sale price can be far larger than what you actually paid, so it shelters more of the gain.

One rule matters: when you use the deemed cost, you do not also deduct the real purchase price or the selling costs. The deemed figure stands in for all of them.

The gain that remains is taxed as capital income: 30 percent up to 30,000 euros of capital income per year, and 34 percent on the part above 30,000 euros. The 30,000 euro band covers your total capital income for the year, so dividends and other capital income count toward it too. Because tax is per person, each individual gets that comparison and that band on their own.

Frequently asked questions

How is the deemed acquisition cost calculated?

It is a fixed share of the sale price, not of your purchase price. You use 20 percent of the sale price if you held the asset for less than 10 years, and 40 percent if you held it for 10 years or more. HomeCFO applies the right rate from the holding period.

Can I deduct my purchase price and the deemed cost together?

No. The deemed acquisition cost replaces your actual costs. When you use it, you do not also subtract the real purchase price or the selling costs. You choose one method per sale: either your actual cost basis with real expenses, or the deemed cost on its own.

Does my spouse’s sale affect my deemed cost comparison?

No. Finnish capital gains tax is per individual. Each person has their own deemed cost comparison, their own 30,000 euro rate threshold, and their own loss carry-forward pool. Your sales and your spouse’s sales are worked out separately, even inside the same household.

See how it works in HomeCFO.