kunnallisveroilla

Kunnallisvero, translated as municipal tax, is a local tax levied in Finland by individual municipalities to fund public services at the local level. The tax applies to residents, non‑resident property owners, and corporate entities operating within the municipality. It is a primary source of local revenue, alongside shares of national taxes and property fees.

The tax has two principal components: an income‑based municipal share of the personal income tax and a property tax on real estate. The personal component is deducted at source from a taxpayer’s salary and is proportional to the national income tax deductibility, generally ranging from about 5 % to 18 % of taxable income. The property tax is calculated on the cadastral value of the property, with rates set by each municipality. Rates typically fall between 0.3 % and 1.8 % of the assessed value, though high‑income municipalities may set higher rates. Special exemptions or reductions are available for elderly residents, disability allowances, and certain low‑income groups.

Municipalities can adjust tax rates each fiscal year within the limits specified by the Municipal Tax Act (Kokous- ja talouslainsäädäntö). The revenue from kunnallisvero funds schools, fire services, local transport, waste management, public housing, and cultural activities. The amount of municipal tax a taxpayer pays can considerably influence the quality of public services received.

Legally, kunnallisvero is governed by Finland’s Taxation Act and the Local Government Act. The tax is administered by the national Tax Administration in coordination with the municipal tax office. Because municipalities set the rates, there is significant variation across regions; a comparative study of municipal tax rates over the past decade shows a consistent trend toward balancing income‐generating capacity with service demand.