That's a tough question because it depends on the value of the property as to many of the associated 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.
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.