The Finnish Parliament, the Eduskunta, has approved a legislative amendment to raise the tax-free thresholds for inheritance and gifts. The vote on Wednesday saw 114 members of parliament in favor, with 52 against and 33 absent. This policy change represents a significant shift in Finland's approach to wealth transfer taxation and carries implications for family finances and state revenue. The reform was a key component of the governing coalition's economic program, led by Prime Minister Petteri Orpo of the National Coalition Party (Kokoomus). The amendments will take effect at the start of the next calendar year.
The core of the legislative change involves three specific increases to tax-free allowances. The inheritance tax threshold will rise from 20,000 euros to 30,000 euros. This means any inheritance valued below this new limit will be entirely exempt from taxation. Similarly, the threshold for taxable gifts will increase from 5,000 euros to 7,500 euros. A third adjustment raises the tax-free allowance for ordinary household movable property from 4,000 euros to 7,500 euros. These changes collectively reduce the tax burden on all taxable inheritances and gifts, as the tax calculation now begins from a higher base amount.
This decision follows a broader political debate about wealth taxation in Finland. Earlier in the year, a government working group on growth, established by Prime Minister Orpo, had proposed the complete abolition of inheritance and gift taxes. The coalition government, which includes the Finns Party and the Swedish People's Party, ultimately settled on these reductions instead of full elimination. The move aligns with the government's stated goal of stimulating capital accumulation and intergenerational wealth transfer within Finnish families. Critics argue it primarily benefits wealthier households, while supporters claim it reduces administrative complexity and supports middle-class estate planning.
The policy has clear implications within the European Union context, where member states maintain sovereignty over direct taxation like inheritance duties. Finland's move contrasts with trends in some other Nordic and EU nations that are scrutinizing wealth taxes to address inequality. The reform will directly impact how Finns plan for the transfer of assets, particularly family homes and summer cottages, which are culturally significant. The tax payable on any inheritance above the new thresholds still depends on the total value of the estate and the familial relationship between the heir and the deceased, with closer relatives benefiting from lower tax rates.
From a practical standpoint, these changes simplify estate administration for many families. A larger number of estates will now fall completely outside the tax authority's review process. This reduces paperwork and potential legal costs for heirs. The increase in the gift tax threshold also allows for more substantial inter vivos gifts without triggering a tax liability, which can be a useful tool for family financial planning. The government's push for this reform, passed from the April mid-term budget session to a final parliamentary vote, indicates its priority status within the coalition's fiscal agenda. The real-world effect will be measurable in state tax revenue reports following implementation, providing a concrete data point for future debates on Finland's tax structure.