The process of buying property in Latvia

Briefly about the main thing

Latvia does not need a special introduction for Russians. Conveniently located, with a mild climate, picturesque nature, interesting offers on the real estate market, this country is deservedly loved by our compatriots. The process of buying a home here is transparent and understandable, and, as in any state, has its own characteristics. 

Foreigners have the right to purchase residential or commercial real estate in Latvia without restrictions. Buying any object, even for a relatively minimal amount, grants the owner the right to obtain a long-term Schengen visa for all family members. With a purchase in the amount of  €250,000, you can get a temporary residence permit in Latvia for five years with the possibility of further extension.

A feature of the acquisition of real estate in Latvia is the mandatory official, documentary, confirmation of the legality of the origin of funds for the purchase of real estate. 

Reliability guarantee

From the point of view of legal registration, the purchase and sale of real estate in Latvia is reliable and protected by law. Experts recommend contacting a trusted real estate agency with extensive experience in the Latvian real estate market. Such companies always have their own lawyer who will help the buyer in carrying out the transaction. This is a guarantee not only of the correct choice of the object, but also of compliance with the law, as well as the competent execution of all steps of the purchase and sale transaction.

If the object is purchased from the developer, then a lawyer is also present on his side: in this case, both lawyers agree on the text of the contract. From «official» persons in Latvia, a notary is involved in the transaction, who signs one document— a petition  on the re-registration of property rights in the Land Register. The Land Book is a single centralized database, a register of data on all real estate objects in Latvia.

Possible limitations

In Latvia, there are restrictions on the purchase by foreigners of agricultural land, forest land, as well as some areas located on the shores of reservoirs and having their own coastline. For the acquisition of any land plots, including those on which residential or commercial facilities are built, a foreign citizen must obtain a permit from the local government. This document is issued easily and has a rather formal character.

Experts recommend that when buying land for construction or a ready-made private house with a plot of land, conduct a deep analysis of the status of the land plot, the possibilities and norms of its development, as well as the presence of restrictions on the purchase by foreigners. Also in Latvia, quite a large number of real estate objects are co-owned (shared ownership). It has its own design specifics, but does not pose a risk to the buyer, since it is well regulated by Latvian legislation in the field of shared ownership. It is necessary to carefully assess the condition of the secondary object before buying.

A reliable Latvian real estate agency will help the buyer to check for possible restrictions on the object.

Stages of buying real estate in Latvia

1. Search and selection of real estate according to the goals of the buyer;
2. Arrival for inspection;
3. Verification of the seller's ownership and the legal status of the object;
4. Coordination of all terms of the transaction (terms, amount, payment terms, transfer of ownership and actual transfer of ownership to the buyer);
5. Conclusion of a preliminary agreement or a deposit agreement (at the request of the parties). This contract fixes the purchase amount, the deadline for signing the contract. A deposit is transferred, which is not refunded if the buyer refuses the transaction. If the seller refuses, the deposit is returned in double amount.Does not require notarization;
6. Signing of the contract of sale and notarial application for re-registration of ownership;
7. Collection of necessary permits and certificates from the self-government body;
8. Crediting by the buyer of the purchase amount to the transaction account in the bank (tripartite agreement "buyer-seller-bank"), or to the storage account with a notary (at the choice of the parties and the terms of the contract of sale). Funds are stored on it until the end of the transaction;
9. Payment by the buyer of the state tax on the purchase of real estate in the amount of 2% of the transaction amount, as well as clerical duty;
10. Submission of all documents for re-registration of property rights in the name of the buyer in the Land Register;
11. A notary or a bank checks the data of the Land Register on the change of the owner of the property and the absence of a loan;
12. Within 10 working days after submitting the documents to the Land Register, the buyer is issued a certificate confirming his ownership;
13. The transaction amount is transferred to the seller, the property is transferred to the buyer for use. The acceptance and transfer certificate is signed.

Transaction costs

The lawyer of the Latvian real estate agency can, if necessary, perform all stages of the transaction by proxy from the buyer. In this case, he does not need to come to Latvia again to sign documents.

1. Notary, legal support of the transaction — €150-500;
2. State duty on the purchase of real estate — 2% of the transaction amount;
3. Stationery duty — €21,34;
4. Opening a transaction account in a bank (if necessary) 0.5-1.5% of the transaction amount. As an alternative — storing the purchase amount in a notary's account— €100-400;
5. Annual tax on real estate depending on its type, location and size of the cadastral value from 0.2% to 1.5% of the cadastral value of the object per year;
6. If you wish to obtain a residence permit based on the purchase of real estate when submitting documents for consideration, a state fee of €142;is paid
7. With a positive decision to issue a residence permit , a one-time contribution to the state budget in the amount of 5% of the purchase amount of real estate is paid, as well as  €28 for the issuance of an ID card, plus insurance;
8. Assistance of a qualified lawyer in obtaining a residence permit (collection, filling in and submission of all necessary documents) is paid additionally, the amount is negotiable.

Example of costs

Let's consider as an example the costs of making a transaction the purchase of a new apartment of 95 sq. m. located in the very center of Jurmala, in Dzintari, 150 meters from the sea, worth €300 000.

1. Purchase tax 2% (€6000);
2. Transaction costs, including notary services and storage of funds in his account — €400;
3. Annual property tax— approximately €200;
4. Utility bills: in summer about €200 per month, in winter about €330 per month.
5. If you want to get a residence permit when buying this apartment, you will pay a one-time contribution to the state budget in the amount of 5% of the cost, or €15 000, fees for reviewing and obtaining a residence permit, and other expenses— about €250 per person.

Some tips on making a deal for all buyers of real estate in Latvia.

1. Contact reliable, proven real estate agencies that have been working on the market for a long time, and not to "independently" working lawyers, bank representatives, etc. It is especially worth avoiding the advice and participation of people who have nothing to do with the real estate market.
2. If the property is offered at a real market price, then you should not count on a 20-30% discount.
Be prepared to provide proof of the legality of the origin of funds for the purchase of real estate.
3. Checkdocuments and pay attention to the possibility of a foreigner buying the selected object before signing any contracts.
4. If you want to get a residence permit in Latvia, keep in mind that for the amount of €250,000 you can buy a nice 3-room apartment in the center of Riga or in Jurmala, as well as a house in the prestigious suburbs of Riga.
5. Choose high-qualityobjects in new buildings or houses of the secondary market that have undergone a complete renovation. There are no hidden problems with quality, utility bills or neighbors in such objects.
6. Buy a house now, don't wait. Housing prices are steadily rising, and good quality offers in Latvia are selling quickly.
7. Keep in mind that if you plan to rent out real estate, then the official tax to the state will be 10% of the amount of income.