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can I have a freehold/ownership of property (apartment) in

Customer Question

can I have a freehold/ownership of property (apartment) in Latvia, as a foreigner, non investor, non EU citizen?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Pro replied 1 year ago.

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There are no restrictions on foreign ownership of property in Latvia.
In Latvia, real estate agents and notaries perform the major functions associated with the buying and selling of real estate. Real estate agents are not licensed, but LANIDA, ICREA’s member association organizes voluntary training courses and certifications for agents. The notary is responsible for holding in escrow any deposit for the property by the buyer, making certain that title to the real estate is genuinely held by the seller and making sure there are no liens or encumbrances on the property.
The initial step in the real estate sales process is the execution of the initial contract for sale. Buyers pay a deposit to the notary which is normally in the amount of 10% of the overall purchase price. After the initial contract has been executed, the notary proceeds to assure that the title is properly held and can be freely transferred to the buyer at closing with no encumbrances. Real estate agents will often assist the buyer in arranging a structural inspection of the property at this time. Initial contracts should contain clauses to allow the buyer to recoup this deposit in the event that the structural report reveals serious defects in the property or if the seller backs out of the deal for any reason. Once these tasks have been conclude, the buyer and seller move forward to execution of the final agreement which results in the conveyance of the title from the seller to the buyer. Title will then be filed with the land registry authorities of Latvia. All properties are registered in the Land Register which is overseen by the Latvian Ministry of Justice. Land records are computerized (http://www.zemesgramata.lv/show_external.asp?id=12), open to the public and copies are available for a fee. Foreign nationals should be aware that there is a value added tax of 18% attached to the sale of real estate in Latvia. It is important that the buyer keep this in mind when looking for financing for the property.
For detailed information and professional advice about buying a property in Latvia, consult a member of ICREA’s member association, LANIDA


For additional resources on buying property in Latvia,click here,


http://www.channel4.com/4homes/buying-selling/buying-selling-abroad/country-guides/the-baltic-states-08-05-29_p_1.html



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Law Pro, Lawyer
Category: Real Estate Law
Satisfied Customers: 23478
Experience: 20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
Law Pro and 6 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you mr.Fred..


1) Can you count for my the Extra charge (Taxes and Fees) when purchasing new property..


2) and the periodical tax every year + the utilities.


 


Or should I open new Questions for that?


 


my regards

Expert:  Law Pro replied 1 year ago.
That's a tough question because it depends on the value of the property as to many of the associated costs.

Transaction Costs

Who Pays?
Stamp Duty 2% buyer
Notary Fee 0.10% (+ 22% VAT) buyer
Real Estate Agent´s Fee 2% - 5% seller
Costs paid by buyer 2.122%
Costs paid by seller 2.00% - 5.00%
ROUNDTRIP TRANSACTION COSTS 4.122% - 7.122%


After a property has been chosen, the buyer and seller sign a preliminary contract. Upon signing the buyer pays a 10% deposit, which can be held in an escrow account by the lawyer or notary. Once all is well with the property, the Notary Act or Contract of Purchase is drawn up by the buyer’s solicitor and then signed by both parties in the presence of a notary in Latvia, or in the buyer’s local Latvian embassy if he cannot be in the country on the day of contract completion.

All immovable property must be registered in the Land Book. Land and buildings are registered separately. If the real estate transaction is not registered in the Land Book, the purchaser may not effectively transfer the title or enforce other real property rights until the registration has taken place.

It takes an average of 18 to 33 days to complete the nine procedures needed to register a property in Latvia.

 

Value Added Tax (VAT) of 22% is imposed on the sale of newly built real estate (or for properties sold within one year of construction or reconstruction), but is exempt on used real estate.

 

The stamp duty is levied at 2% on either the sale price, or the cadastral value of the property, whichever is higher, but capped at LVL30,000 (€56,315).

 

 

Registration fees include application fees and processing fees for registration of title and receipt of registration certificate. While a lawyer or notary is not required, some parties prefer to hire one. Notary fees are generally around LVL120 (€225), plus + 22% VAT. Total notary and registration fees are minimal and are not expected to exceed 0.5% of property value.

 

Real estate agent´s fees are negotiable and generally range from 2% to 5% of purchase price.

 

[globalpropertyguide.com]

 

 


Unlike other countries where an asking price can be a starting figure in the Baltic States the asking Latvia property price is usually very close to the selling price if not the actual price itself.
There is a building boom in the Baltic States with estimates of some 3000 properties per year needed to keep up with demand; with so much property growth going on there isn't much room to haggle.
Your Latvia property agent will assist you with finding your ideal Latvia property, he will know what properties are for sale and with his knowledge of the Latvia property market, and you will avoid any surprises. i.e. if you purchase a property in a city that property may be under a National Heritage protection which limits what improvements can be made.
If purchasing a property in the countryside beware:
There are laws which prohibit construction on riverbanks and lakeshores. If not aware of any of these, the property purchase price will only be the beginning of your investment.
Your agent will assist you in getting you a property expert to look over the structure, this is important for both new and old properties.
The need to know the condition of an older property is obvious. And with new property, your property expert will confirm that everything has been constructed as it should be and as per the plans.
In Latvia a 2 year guarantee is given although not the 10 years we are used to, it's better than nothing, and adds some comfort to property purchase.Costs of purchasing property in Latvia
The public Notary plays a significant part in property purchase, their fees are fixed by the state and vary between one half to a full one percent of the purchase price and are the main cost of property purchase.
In all countries ask questions about state taxes on the property purchase, property taxes, and land registration costs.
And if any vat taxes (18% in all Baltic States) are incurred they should always be included in the selling price.
In Latvia property taxes are 1.5% of the property value assigned by the state; this is always lower than the market value.

 

[globespanproperty.com]

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