Finland: Top 5 significant legislative changes, regulatory developments or trends affecting the construction industry

New Building Act

Finland is going through a major reform of the land use and building framework. The Land Use and Building Act has been split into two separate laws: the sections regulating construction and permitting were repealed and replaced by a new Building Act, which entered into force on 1 January 2025. The reform is intended to streamline permitting and reduce administrative burden, support digitalization of the built environment, and drive low-carbon construction, emission reductions, and circular-economy outcomes. Additional changes to the Building Act are being drafted by the Ministry of Environment to implement the requirements of the Energy Performance of Buildings Directive (EPBD) and the Renewable Energy Directive (RED II).

Some of the key elements became effective after a grace period in January 2026, including (i) a statutory processing-time guarantee for building permits (generally three months and six months for more demanding projects), (ii) carbon footprint calculation requirements for new buildings, and (iii) a BIM/model-based building permitting process. The reform also intends to simplify the permit framework by consolidating prior permit types into a single building permit and raising the permit threshold for minor works, while retaining compliance obligations under building regulations and zoning.

Ideally, the streamlined permitting process should be more foreseeable and faster for applicants. For certain green transition project types, the new procedure for a clean transition placement permit allows the applicant to pursue a building permit without an effective zoning plan in place, which can materially shorten the overall permitting timeline.

Other amendments to the Building Act are also being prepared, including provisions on permanent residence and short-term use of apartments, which will affect the business environment of short-term letting platforms, local service providers, investors, and homeowners as well.

New Land Use Act

The remaining sections of the previous law regulating zoning and land use are expected to be replaced by a new Land Use Act during 2026. The new Land Use Act will be based on the current three-layered zoning system and the municipal level will be the focal point of detailed planning also in the future.

A working group has prepared a draft proposal to amend (i) the Public Procurement Act and (ii) the Utilities Procurement Act to implement the Finnish Government’s procurement objectives including improved efficiency/cost savings, increased SME participation, and stronger treatment of security of supply and responsibility themes in procurement and contract management. The draft would, among other things, introduce a presumptive obligation to re-run the tender procedure where only one tenderer has submitted a bid.

The new legislation also intends to limit the excessive use of in-house service providers. The current Procurement Act does not define the number of owners of an in-house entity, which in practice may lead to situations where a single in-house entity has hundreds of owners. Excessively broad use of in-house entities has been viewed as problematic from the perspective of efficient use of the market.

The laws are intended to enter into force during 2026.

The Ministry of Justice has established a working group to prepare a proposal to update the Housing Transactions Act. The goal of the reform is to update the Act to reflect current market practice.

The initial term of the working group ended in January 2026, and draft amendments to the Act are expected to be brought to Parliament during 2026.

The working group materials identify, in particular, issues and ambiguities in the rules protecting buyers of apartments sold during construction. These include:

• rules on construction-stage and post-completion guarantees;
• the insolvency protection security that should be put in place for the developer/founder shareholder’s non-performance (and situations where that security has not been put in place despite being required);
• buyers’ right to appoint a construction inspector; and
• treatment of bankruptcy scenarios.

The memorandum also notes that it is not unusual for remedial works identified at the one-year inspection to take several years and that the current system allows guarantees to be released automatically after a set period unless release is opposed and escalated to court or the Consumer Disputes Board-creating a substantial caseload (around 300 cases per year concerning opposition to release of security).

The working group’s mandate includes preparing proposals not only for the Housing Transactions Act but also for changes to the decrees governing marketing new residential developments. The memorandum notes that the Housing Marketing Decree has not been updated since it came into force and no longer reflects today’s housing market or marketing practices.

A draft government proposal would introduce a new act on the dismantling of decommissioned onshore wind turbines and a decommissioning security, alongside amendments to the Building Act. The new act would impose a statutory obligation on the owner to dismantle a decommissioned onshore wind turbine and restore the site to its pre-construction condition, with the costs secured by a security provided to the municipal building control authority. The new legislation is intended to enter into force in January 2027.

This is significant particularly for energy infrastructure contractors, developers and funders because it formalises end-of-life obligations and introduces a permitting and security framework that will need to be built into project development, contracting, financing, and long-term asset compliance planning. The memorandum notes that Finland has not previously had comprehensive special legislation for dismantling wind turbines, and legal questions have largely been addressed through contracts and general construction/environmental/waste legislation.

The draft proposes a staggered application for the security and municipal “last resort” dismantling responsibility: while dismantling rules would apply regardless of when turbines were built, security and the municipality’s secondary responsibility would apply only to turbines for which the construction permit is applied for from 2028 onwards (to avoid overlapping security arrangements with existing contractual practices).

The Finnish General Conditions for Building Contracts YSE 1998 are undergoing an update process: negotiations between the developer/client-side organization and the contractor-side organisations began in 2024. The conditions were last updated in 1998. Finland does not have special legislation regarding construction contracts, and therefore, the YSE 1998 conditions are widely used as a market standard in construction works throughout the supply chain in the Finnish market. The parties have set an indicative target timetable of three years for the work which means results can be expected by the end of the year 2027.

The negotiations address, among other things, provisions on changes to the scope and schedule of the works, as well as terms governing the parties' cooperation. The aim stated by the negotiating parties is to facilitate cooperation between the parties and the resolution of disruptions during the project. The goal is to clarify the parts that give rise to different interpretations and uncertainty. The current version also has some inconsistency with mandatory law and needs to be updated.