Government proposes cuts to the general housing allowance starting 1 January 2025

Assets would affect the general housing allowance

The Government proposes that assets would again be taken into account in the general housing allowance. This means that part of the assets of the household would affect the amount of the housing allowance starting 1 January 2025.

The limit for the amount of assets that is taken into account would be EUR 10,000 for single-person households and EUR 20,000 for households of two or more adults. Of the amount that exceeds the limit, 20% would be counted as income in the housing allowance.

If the household has assets of EUR 50,000 or more, no housing allowance would be paid at all.

However, a deduction of EUR 2,000 for disposable income would be made from account deposits. The deduction would be personal, and this amount would thus not affect the general housing allowance.

Any debts would first be deducted from the assets, however.

Example

Peter lives alone in a rental apartment. Peter owns shares in stock to a total value of EUR 15,000. Since this is a single-person household, the amount that exceeds EUR 10,000 (EUR 15,000 - EUR 10,000), i.e. EUR 5,000, would be used to calculate the income on assets for Peter.

The amount of income on assets for Peter would be 20% of this amount of EUR 5,000, i.e. EUR 1,000. Peter's assets would thus affect the amount of the housing allowance by EUR 1,000 per year, i.e. EUR 83.33 per month. Furthermore, Peter's earnings and capital income would count as income.

Assets that would be taken into account after the legislative change:

• real estate, not including summer cottage in own use 
• shares in a housing cooperative
• deposits
• business and farming assets as well as shares in corporate assets
• forests
• bonds or equivalent
• publicly listed shares and shares in mutual funds
• insurance savings.

Assets such as shares in an undivided estate or deposits on an ASP (home saver’s bonus) account would not be taken into account.

The housing allowance would decrease for most recipients in Kajaani, Kouvola, Lappeenranta, Mikkeli, Pori and Vaasa

The Government proposes that the municipal categories for determining the maximum housing costs recognised for the general housing allowance are reviewed.

The law specifies maximum amounts for housing costs based on which one can get general housing allowance. That amount is referred to as maximum housing costs. The maximum amount of the housing costs is affected by such factors as the municipality in which the home is located. Finnish municipalities are divided into three groups according to the cost of living there.

According to the Government proposal, Kajaani, Kouvola, Lappeenranta, Mikkeli, Pori and Vaasa would be transferred from the municipal category II to the municipal category III. This means that the maximum amount of recognised housing costs for those who live in these towns would decrease. As a consequence, the housing allowance for almost all recipient households in these towns would decrease.

Housing allowance no longer available for owner-occupied homes

Parliament has already decided that, as of 1 January 2025, general housing allowance will no longer be available for housing costs for owner-occupied homes, such as maintenance charges, maintenance costs for single-family homes and interest payments on housing loans.

The changes do not apply to the housing allowance for pensioners.

December 2024 will be the last month for which general housing allowance is still available for owner-occupied homes. Read more about the change: General housing allowance will no longer be available for owner-occupied homes starting 1 January 2025.

The changes to the general housing allowance would enter into force on 1 January 2025. The changes would affect the amount of the housing allowance at the latest when the housing allowance is reviewed the next time.

If you apply for general housing allowance starting 1 January 2025 or thereafter, the changes affect the amount of the housing allowance immediately.

The change concerning owner-occupied homes will enter into force on 1 January 2025. December 2024 will be the last month for which general housing allowance is still available for owner-occupied homes.

You do not have to apply for a review of the general housing allowance just because of the legislative changes. If your situation changes, you must apply for a review of the general housing allowance.

See when you must apply for a review of the general housing allowance.