Add listing Log in

Residence permit in Latvia in exchange for investments in real estate

Last Thursday, 8 may, the Saeima finally approved amendments to the immigration act. Now from 1 September 2014 to obtain a residence permit when buying real estate the transaction value shall not be less than 250 thousand Euro.
13.05.2014
Homesoverseas.ru editorial office
124

Main changes in the program

The program for obtaining a residence permit in exchange for investments in real estate in Latvia was adopted in 2010. Last year, the Seimas proposed amendments to the law restricting foreigners from obtaining a residence permit in Latvia. However, the president again sent them for revision indefinitely, referring to the fact that they do not hinder the growth of real estate prices and will cause distrust among investors.

Previously, the amount of real estate purchase for obtaining a residence permit had to be at least 143 thousand euros in large cities and Riga region. Also, according to the latest amendments, the possibility of obtaining a residence permit for five years was canceled if at least 50 thousand euros were contributed to the country's budget.

The conditions for the purchase of real estate, valid until September 1, 2014, are as follows - at least 143,000 euros (cadastral value 43,000 euros) in Riga, the Riga planning region and 7 major cities, and 72,000 euros in the remaining districts (14,000 according to the cadastre).

In October 2013, the Parliament voted to introduce quotas for the issuance of residence permits for up to 700 real estate transactions worth more than 150,000 euros and another 100 transactions per year worth more than 500,000 euros.

The amendments to the law finalized and adopted on May 8 no longer contain restrictions on the number of transactions, but the minimum value of real estate raised to 250,000 euros no longer depends on the place of purchase. As for the cadastral value, its threshold has been raised to 80,000 euros. If the cadastral valuation is less than this amount, it will be necessary to conduct an appraiser's examination confirming that the market value of the object is not less than the threshold, 250,000 euros.

Changes in the conditions for the purchase of real estate

Firstly, for the specified amount, you can now purchase only one object, and not two or several, as it was before. This amendment will upset those applicants who planned to purchase 2 real estate units at the same time – one for housing, the other for renting.

Secondly, an undeveloped plot of land can no longer serve as a basis for a residence permit. The purchase will be considered housing, house or apartment.

The third new condition is a one–time fee from the applicant for a residence permit in the amount of 5% of the contract amount. Recall that, regardless of this, when buying real estate, the buyer pays 2% for registering his real estate in the Land Register.

Program results

According to statistics, it was the Russians who became the main investors under the residence permit program. According to the Office of Citizenship and Migration Affairs of Latvia, by the end of 2013, that is, for 3.5 years of the Law "On Immigration" as amended in 2010-2012, foreigners invested almost 815 million euros in the Latvian economy. Of these, approximately 660 million euros - in the purchase of real estate, 110 million euros - in the subordinated capital of banks, and about 47 million - in the authorized capital of companies.

These investments were made by citizens of 38 countries, a total of 9670 people, applicants and their family members participated in the program. The main recipients of a residence permit are Russian citizens – there were 6883 of them, of which 3,100 people became residents of Latvia in 2013.

In 2014, a residence permit has already been issued to 1,225 persons, and 26 persons have been denied a residence permit. I would especially like to note that the procedure for issuing a residence permit in general has been very friendly all these years, and the percentage of refusals is very small, and according to available data, refusals have formal reasons.

The program implemented in Latvia to attract foreign investors has made a significant contribution to the Latvian economy, moreover, at relatively low administrative costs. In total, the profit for the Latvian economy during the implementation of the program amounted to about 600 million euros, so any restrictions on this program or its suspension will entail significant consequences not only for the real estate sector, but also for the development of Latvia as a whole.
Since the investment flow continues and has an even more turbulent flow at the beginning of the year, it can be assumed that the total amount of investment in the economy under the residence permit program will exceed 1 billion euros.

Thomas Rixis, Baltic Expert:

"Now the three most popular ways to obtain a residence permit for investors are buying real estate, a deposit in a bank of at least 280 000 euros for a period of at least 5 years and, finally, a business in Latvia that will bring the state tax income of at least 40,000 euros.

Compared to other countries that provide a similar service, Latvia is currently the most competitive. For example, people can come here once a year only to extend their residence permit, but they will still receive free medical care, and their children will receive free education. Everyone speaks Russian here, it's easy to start a business, delicious food - and many more bonuses.

There were discussions about the advantages and disadvantages of the program. Most of all, they talked about the fact that real estate is becoming more expensive in connection with it, it is becoming more difficult for local residents to buy housing.

My opinion is that the economy is growing, the country is becoming more beautiful and the most important thing is that smart people come who want to work and relax here, and often stay to live. This is a great economic, intellectual and cultural contribution to our country.

I think that the program will not be canceled, but it may become even more expensive. Visitors immediately fall in love with Riga, Jurmala and our other cities, and the territory of Latvia and the volume of supply in it are not unlimited."

Svetlana Lvova, Latland:

"In our experience, significantly more than half of the applicants for a residence permit, buyers of real estate in Latvia, purchased housing for themselves, but not as a tool for travel. Quite a significant part is for permanent residence, part is for family residence, in the case when the business of the head of the family is connected with Russia, and he does not let him go, or does not immediately let him go to a new place of residence. Yes, some buyers start negotiations with the phrase “I need an apartment that I can rent profitably.” But at the same time, quite a large number of new owners of lucky ID cards are buyers of real estate on the Baltic Sea coast. And in particular housing in Jurmala, which they use during the short summer season, or sometimes come for weekends.

Now, with an increase in the bar from 143,000 to 250,000 euros, most of the new projects in central Jurmala remain in the game, since small “country” apartments start from about these prices.

Another thing is the changes in the price threshold throughout Latvia. As realtors, this news could not but upset us. For the entire existence of the program since 2010, we have had a lot of requests for housing in the province (for the price threshold set before from 73 thousand euros), but, paradoxically, the market had almost no offers for such people.

In 2014, the long-awaited law on the possibility of selling agricultural land to EU citizens was adopted. But again, these exemptions do not apply to those countries that supply the overwhelming number of applicants for a residence permit.

Latvian politicians are afraid of “Russian expansion" now more than ever. More active reshuffles are likely among politicians, due to general tension, as in many other governments. However, amendments to the law, which gives such a real increase to the economy (the bureaucratic costs are incomparably small), most likely, should work effectively for some period of time.

It is clear that in the new edition the program will be less popular with Russians."

Artem Pan, ART Baltic's Estate:

"The program has, first of all, an economic basis – an interest in the inflow of investments, so many deputies of the Seimas defend the law, including the President of Latvia. The advantages of the inflow of investments into the country are obvious and extremely relevant – this is clear to everyone in Latvia, including opponents of the law.

But at the same time, the law on residence permit suffers from attacks by the same opponents who are guided solely by political considerations and populist slogans of the anti-Russian part of the population of Latvia. Raising the threshold to 250,000 euros is precisely their initiative.

What will happen next is not yet clear. But all of us, real estate market players, hope for the best."

Daniil Burygin
HomesOverseas.ru

0
All articles by this country
All articles
Property in Latvia
Discussion
soheir mohran
request doing business have agent in egypt
26th of Sep 2015, 14:18:32
Reply
Arthur
2Âèêòîð Putin: you just need to hurry before 1 September there is still time!
14 of May 2014, 11:55:20
Reply
Arthur
All very reasonable. My family and I have 3 years has a residence permit in Latvia under this program. Latvia is a beautiful country!!! A proposal for real estate during these three years has decreased significantly. TC sold the facilities built before 2008 crisis year and the secondary housing. All cute, one might say,has already been sold. To start a new construction need a guarantee for the future and stimulating the raise of prices. A new edition of all this and implements ! Well done!While the Russian authorities are doing everything possible to programme participants with every passing day more and more!
14 of May 2014, 11:52:40
Reply
Viktor Vladimirovich
I the pensioner, the invalid of the General disease. Wife also retired.
Her pension of about 300 euros, my about 1 750, in Moscow have a travel Agency. All this allows quite confidently claim to be completely independent of government handouts people. Had intended with his wife to buy an apartment in Jurmala and summer time in Latvia. I have cardiology and Jurmala the air, they say, is useful for our brother. Now the lights out! And not for financial reasons, as appropriate.
You have to be just crazy to a quarter of a million freeze vacant for six months, the concrete squares of the bullpen.
Say we have Godora, looks like Russia to this status does not have a monopoly.
Goodbye, Jurmala.
14 of May 2014, 01:17:18
Reply
Diana
With Your permission this question. I live 5 years in Prague. But would love to move to Latvia, namely Riga. I am an old Muscovite and money I have none. But here's what I have in Prague 5 years residence permit, can it give me the opportunity to obtain a permanent residence permit or extend the residence permit in Latvia
Thanks for the reply
13 of May 2014, 23:48:41
Reply
my-my
Ah, come straight to us in Berlin
skype: ksm-berlin
13 of May 2014, 21:28:57
Reply