The property tax paid on wind power plants is a significant source of income for several municipalities. There are already numerous municipalities in Finland that receive more than one million euros in tax revenue each year thanks to wind power plants. Northern Ostrobothnia, where Finnish wind power construction is strongly concentrated, benefits most from the vitality brought by wind power plants.
Last year, wind power generated a property tax of approximately EUR 6.9 million in Northern Ostrobothnia. 37 per cent of Finland’s wind power plants are located in the municipalities of the province of Northern Ostrobothnia, where the largest tax benefits also go. The Kalajoki wind farms generated property tax revenue for the city of approximately EUR 1.6 million in 2021. In addition to Kalajoki, Ii, Pyhäjoki, Raahe and Pori each received more than one million euros in tax revenue from wind power plant property taxes last year. Simo became the largest wind power plant with the wind power capacity built in 2021, but the property tax on the new power plants built in Simo will not be fully reflected in the municipal treasury until 2023.
“Building wind power is a major investment in areas where it has been difficult to attract them. Wind power has often been the savior of small municipalities. The construction period is already bringing vitality to local service providers and permanent jobs are also expected for service and maintenance workers. In addition, the compensation received by landowners brings more vitality to the municipal economies, ”says Anni Mikkonen, CEO of the Finnish Wind Power Association.
“We are working to bring more wind power to Eastern Finland as well and to allow municipalities to benefit from wind power property tax revenues,” Mikkonen continues.
The onshore wind turbine generator located in the wind power plant accumulates more than EUR 400,000 in property tax during its life cycle, if the municipality has introduced the highest possible property tax rate for the power plant. Most wind turbine generators in Finland are located in wind power plants and are taxed according to the wind power plant’s property tax rate, which can be up to 3.1 per cent.
“The real estate tax revenues brought to us by wind power are significant, so-called extra addition to the economy. In concrete terms, it is currently reflected in the income of local residents, for example, as a lower income tax. According to plans, the number of Kalajoki wind turbines will almost double over the next couple of years and it will enable competitive income taxation even after the regional administration reform, ”says Pirjo Männistö, CFO of Kalajoki.
“We can also offer our residents more diverse and better quality basic services as well as more advanced leisure services. Real estate tax revenues accumulated from wind power plants enable e.g. investment in the spatial planning and the construction of municipal technology. The proceeds from the sale and lease of the land will be returned to the municipality for utilization, for example in the production of basic services, ”says Männistö.
“There are maintenance units for wind power manufacturers in Kalajoki, which employ 40 people. The employment and economic impact of wind power is also visible in the port of Kalajoki, through which components of wind power plants are transported to the northern region, ”Männistö adds.
The structure that is subject to property tax from the wind power plant is the foundations, the tower and the frame of the engine room. Machinery and equipment are not subject to property tax. The exact amount of real estate tax is affected by many things, but in the first year the full real estate tax is about EUR 30,000 / onshore wind farm, if the municipality has a 3.1 per cent real estate tax rate. The average property tax over 30 years is approximately EUR 22,000 / year / onshore wind farm.
Finland’s five municipalities with the highest wind power plant property tax:
|Municipality||Property tax on wind turbine generators (€)||WTG’s|
|Kalajoki||1 550 243||64|
|Ii||1 172 819||56|
|Pyhäjoki||1 138 452||43|
|Raahe||1 099 180||62|
|Pori||1 022 116||37|
|IN TOTAL||5 982 810||262|
(Statistics yr. 2021, Vero.fi)
Wind turbine generators built in 2021 will not start accumulating full real estate tax revenue until 2022 or 2023, depending on the exact time of completion of the power plant, and the real estate tax will not yet appear in full in the 2021 statistics.