Country Guides Country Guide: The Baltic States

Date Published:

18/06/2009

Purchase Process

As EU member states, foreigners are not restricted from owning property in Estonia, Latvia and Lithuania – except on land, where permission is required. The buying process is a relatively straightforward one but you should ensure that you engage the services of an independent English-speaking solicitor who will look after your interests and not the seller’s.

When you have found a property that you are interested in buying, as you would in the UK, you should make an offer to purchase through an estate agent. Depending on whether the property is new or a resale, you may be asked to pay a reservation fee of £1,000. If buying a new property, stage payments will be made; an older property will be paid for outright, as in the UK.

In Estonia, title deeds to do not exist. A notarised application is made to the Land Register to transfer the ownership of the property to the buyer. Thereafter, the title is legally valid. The purchase process and costs vary from country to country.

If you are considering buying in Latvia, for example, factor into your purchase costs that 18 per cent VAT 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. Always engage the services of an independent English-speaking solicitor. See the Law Society website at www.lawsociety.org.uk for a list of international solicitors.

Purchase Costs

Based on a £100,000 property you should expect to pay the following in Latvia (small deviations apply in each of the countries):

Exit Costs

Capital gains tax differs in each country, ranging from 0 per cent after two years' ownership in Estonia to 15 per cent in Lithuania, where any gain is taxed as income. In Latvia, CGT is exempt after one year’s ownership; taxable as ordinary income at 25 per cent if sold before. In Latvia, the seller pays estate agents’ fees of 2-5 per cent.

Mortgage Status

Latvian banks will loan 80 per cent of the property value (LTV) up to 30 years, based on your ability to repay from income; interest rates are around 4.5 per cent.