The real Estate Business involves buying, selling, or leasing a property, building, home, or land. Realtors assist homeowners, businesses and investors buy and selling properties, buildings, homes, or land. Real estate is a brilliant way to invest your money as it is considered more profitable than a bank deposit when looking in the long term. Latvia’s real estate sector is known for its openness to business.
Purchasing Real Estate
Buying real estate in Latvia is an integral part of the real estate market entry process and it is simple and direct. It is however important to note that the real estate in question is to be purchased separately from the land it is built on. Land purchase by foreigners must be allowed by the local government, where each case of purchase is reviewed separately. In Latvia, the immovable property to be bought needs to be verified by the respective authorities before purchase which can either be done online (costs 2.85 EUR) or in person (4.27 EUR).
A preliminary contract satisfactory to both parties (buyer and seller) is drafted and signed by both parties. The buyer then pays 10% in advance as a deposit and the buyer’s law consultant (solicitor) drafts the contract of purchase. After both parties sign this final contract in front of a notary, they can sell their home to the new owner.
Registering Real Estate
The purchased real estate has to be registered with the National Real Estate Cadaster of Latvia for it to be legally transferred to the buyer. The procedure may take up to 10 business days to process although it is quite straightforward. The fees to be paid for registering the property includes;
- Title registration fee- 14.23 EUR
- Registration certificate fee- 7.11 EUR
- 2% of either the real estate price or the purchase price (whichever is higher)
- Title registration stamp duty- not more than 42 686.15 EUR
- Note: Land and building registration are separate are registered separately, same with selling them.
Real Estate Construction
If the industry intends to build its structures in Latvia, a building permit must be obtained from the local municipality. The correspondence of your projected building to the general layout and the planning of the city is determined by the government. The government also ensures that the building does not violate any rules of that particular area.
The issuing of the permit will come together with technical requirements, approvals, and permissions for the building from the related specialist institutions which include;
- Technical requirements from the Latvian Environment Agency
- Approval from a water and sewage company about how the design should work.
- Approval of the building design of the premises
- Approval of the building conditions
There will be three inspections from government agencies during the building process: the Latvian Environment Agency, the Fire Safety, and Rescue Department, and the Acceptance Commission at the end. The Acceptance Commission will issue a certificate to certify that the new building is in alliance with all the government standards. Registration of building must be with the National Real Estate Cadaster of Latvia then follows.
Real Estate Taxes
Properties used for business purposes include a payable tax of 1.5% on the cadastral value of the real estate. This can however be modified by the municipality, which can set the property tax at 0.2% to 3% of the cadastral value.
