In the amendments to the emigration law on temporary residence permits, it is said that a residence permit is issued only when investing in real estate from 143,000 euros in large cities and from half of this amount in the regions for a family, including minor children. When buying real estate for a smaller amount, an investor can only count on obtaining a multiple-entry Schengen visa. In addition to the obvious advantages of investing in EU real estate, buyers of overseas real estate in Latvia also receive a long-term Schengen visa and the opportunity to travel freely throughout Europe for five years. Latvia has a modern and secure system for registering property rights and takes only a couple of hours, which is an undoubted advantage when buying a home in this country. Purchase taxes After you have selected the property, you must draw up and sign the documents at the notary. In accordance with the terms specified in the sales contract, the buyer must make the payment to the bank account specified in the contract. Then - submit documents to the land office, where it will be necessary to pay tax on the acquisition of real estate - 2% of the value of the object (no more than 30,000 lats, about 43 thousand euros) and 15 lats (22 euros) for office expenses. After 10 days from the date of submission of documents, the buyer receives a land register in his name. The cost of buying real estate in Latvia can be up to 10% of the value of the property. This includes the state duty for re-registration, payment for notary services (sale and purchase agreement, certification of signatures, extracts from state registers) - 0.5% (about 139 lats or 200 euros), agent commission - 2-7% (and from the seller, and the buyer can have his own agent). The services of a lawyer and an interpreter (whose services are paid by the seller) also cost approximately the same. The seller pays sales tax - 15% on capital gains, with the difference between the sale and the proven purchase price, creation. In addition, you must pay value added tax, VAT - 21% (for legal entities). Real estate taxes are 0.2-1.5% of the price set by the authorities for a given region / city, land taxes - 1.5% of the cadastral value. This is not counting municipal taxes, which can be as high as 0.6%. It should also be borne in mind that foreigners staying in the country for more than 183 days are considered taxpayers and must pay income tax. From January 1 of this year, it has been increased from 23 to 26%. Regular taxes and expenses Real estate tax in Latvia is paid by real estate owners or legal owners. The base tax rate is 1.5% of the cadastral value of real estate, land or commercial real estate. There are three tax rates applied to housing, depending on the cadastral value of housing: the real estate tax rate for apartments and private houses ranges from 0.2% to 0.6% of the cadastral value of housing. For real estate, the cadastral value of which does not exceed 40,000 lats, the tax will be 0.2% of the cadastral value, 0.4% for a value of 40,000 to 75,000 lats and 0.6% for a value over 75,000 lats. When calculating the cadastral value, the location of the building, its type, area, physical condition, availability of electricity, bathrooms and other factors are taken into account. The average payment for utilities (gas, electricity, water, heating, housekeeping services) today is 1.0 - 1.4 lats (1.5-2 euros) per sq. m in the summer and LVL 2.1 - 2.8 (3-4 euros) per sq. m in winter. Utility bills on the counters in new houses are more profitable than in the old fund. Payment for cold water and sewerage is 0.8 lats (1.14 euros) per cubic meter. m, for using hot water from LVL 4.6 (EUR 6.65) per cubic meter. m, heating - from 0.5 to 0.7 lats (from 0.71 to 1.87 euros) per 1 sq. m. The starting tariff for electricity is LVL 0.1 (EUR 0.11) per 1 kWh and applies to the user's consumption from 0 to 1200 kWh in a 12-month period from April 1 to March 31, 2013. The basic tariff is LVL 0.1 (EUR 0.14) per 1 kWh, applied to user consumption in excess of 1201 kWh, in a period of 12 months, from April 1 to March 31 of the following year. With electricity tariffs it is not very clear, the court canceled such a division of tariffs as illegal, but Latvenergo appealed and so far there is no final decision. Gas tariffs from July 2012 (price per 1 cubic meter with excise tax and VAT 21%) are: up to 500 m - 0.6 lats (0.88 euros); from 501 m to 25,000 m - LVL 0.4 (EUR 0.59); 100 cc m - 61.2 lats (88 euros). For example, the annual real estate tax for a four-room apartment (83 sq. M.) In a multi-apartment cooperative building will be LVL 49 (EUR 70); operating costs - LVL 251 (360 euros) per year; use of the elevator - 0.7 lats (1 euro) / person; garbage collection fee - LVL 0.8 (EUR 1.2) / person; for electricity (there is an electric stove in the apartment) - 299.3 lats (430 euros). In total, the costs for such an apartment per year are about LVL 1.2 - 1.4 (EUR 1,700 - 2,000). As a rule, with rare exceptions, all apartments are equipped with water, gas and electricity meters, as for heating, it is best if an autonomous heating system is installed. Thus, during absence, there is no need to pay for electricity, water, gas and heating in winter. You just need to pay for housekeeping, which is on average 0.5 - 1.7 lats (0.7-2.5 euros) per sq. m. per month. If the apartment is connected to a central heating system, without a separate meter, then even during the absence, in winter you will have to pay for heating, which is on average 1 LVL (1.5 EUR) per sq. m. Tax for renting Tenants can be found on their own, or by contacting a real estate agency. Real estate agency services are usually paid by the owner of the property. The amount of the commission depends on the rental period. If the property is rented on a long-term basis, the agent's fee is a monthly rent. If for three to six months, half of the monthly fee is usually paid. For shorter periods, the amount is negotiated individually, but usually they amount to no more than a quarter of the monthly fee. In accordance with Latvian legislation, income from the rental of real estate is a business and is subject to personal income tax at a rate of 25% with the ability to deduct expenses or 6% from turnover for individuals and 15% + VAT 21% for legal entities for 2012. Sale of real estate According to the law "On personal income tax", if the owner has owned real estate for more than a year (from the date of the registration of ownership in the Land Register), income from the sale of real estate is not taxed. Otherwise, the tax will be 25%. The basis for taxation is the profit received as the difference between the amount for which the object was purchased and the amount for which it is sold. The presence of real estate in Latvia does not give a foreign citizen the right to any special benefits when obtaining a visa. Gift and inheritance tax When registering a gift agreement in the Land Register, you will have to pay a state fee. Its size depends on the degree of relationship between the donor and the donee. The same applies to inherited real estate. In this case, the amount of the state duty also depends on whether the deceased left a will. Donation tax in Latvia is not paid if donation occurs between spouses and close relatives up to the third stage (children, grandchildren, great-grandchildren, parents, grandmothers, grandfathers, great-grandmothers, great-grandfathers, brothers and sisters, nephews). By law, the inheritance received is not subject to income tax either. However, if the new owner decides to sell or donate the inherited apartment, then he will have to pay on a general basis. In this case, the amount recorded in the inheritance certificate will be considered for the purchase amount. Evgenia Lisina HomesOverseas.ru HomesOverseas.ru would like to thank Alexey Elin from Vigvam for his help in preparing this article.
