Learn Finnish: Uusi kangas on kaunis, ja tuoli on nyt verhoiltu. - The new fabric is beautiful, and the chair is now upholstered.

Verhoiltu is the past passive participle of the verb verhoilla (to upholster). You are learning that these participles (ending in -tu or -ty) act like adjectives describing something that has been acted upon. For a type 3 verb like verhoilla, you drop the final -a and add -tu to get verhoiltu (upholstered).

Is on verhoiltu a passive verb tense here, or an adjective?

In this sentence, it acts as an adjective describing the current physical state of the chair. It looks identical to the passive perfect tense, which means 'has been upholstered'. Because it functions as an adjective here, if you were describing the state of multiple chairs, it would agree in number and you would say tuolit ovat verhoillut.

I noticed verhoiltu looks like the word for curtains (verhot). Are they related?

Yes! The root word is verho, which means a curtain, drape, or cover. The verb verhoilla means to cover with fabric or to upholster. It is very common in Finnish to build new specific verbs out of basic nouns like this.

What happens to the word kangas (fabric) if I need to add endings to it?