How high are realtors´ and lawyers´ fees in Latvia? What about other property purchase costs?
How difficult is the property purchase process in Latvia?
Foreigners can freely buy, develop and dispose of movable property (buildings) in Latvia, provided that the property was acquired separately from the land on which it stands. Direct acquisition of land by foreigners is subject to permission of the local municipality. However, foreigners may lease land for a period of up to 99 years without any restrictions.
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 days to complete the nine procedures needed to register a property in Latvia.
What are the buying and selling costs like in Latvia?
|Real Estate Agent Fee||2% - 5%||seller|
|Costs paid by buyer||2.50%|
|Costs paid by seller||2.00% - 5.00%|
|ROUNDTRIP TRANSACTION COSTS||4.50% - 7.50%|
| See Footnotes
Source: Global Property Guide
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property - lawyers´ fees, notaries´ fees, registration fees, taxes, agents´ fees, etc.
Value Added Tax (VAT) of 21% 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 (€40,000).
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 (€160), plus 21% VAT. Total notary and registration fees are minimal and are not expected to exceed 0.5% of property value.