Authored by the expert who managed and guided the team behind the Estonia Property Pack
Everything you need to know before buying real estate is included in our Estonia Property Pack
Choosing between Estonia and Latvia for property investment requires understanding significant differences in pricing, taxation, and market dynamics.
Estonia offers higher property prices but lower ongoing taxes and better digital infrastructure, while Latvia provides cheaper entry points with golden visa opportunities but higher annual holding costs and more volatile market conditions.
If you want to go deeper, you can check our pack of documents related to the real estate market in Estonia, based on reliable facts and data, not opinions or rumors.
Estonia commands higher property prices (€3,084/m² in Tallinn vs €853/m² in Riga) but offers minimal property taxes and stable long-term growth.
Latvia provides cheaper entry costs and residence permit opportunities through property investment, though with higher ongoing taxation and more market volatility.
| Factor | Estonia | Latvia |
|---|---|---|
| Average Price/m² (Capital) | €3,084 (Tallinn) | €853 (Riga existing stock) |
| Property Tax | No building tax, minimal land tax | 0.2-3% of cadastral value annually |
| Transfer Tax | 0.3% state fee | 1.5% of purchase price |
| Foreign Ownership | Unrestricted (except some land) | Mostly unrestricted |
| Rental Yields | 4-6% gross in Tallinn | 4-6% gross in Riga |
| Residence Permit | Not through property purchase | €250,000+ investment qualifies |
| Market Liquidity | High in main cities | Good in Riga, limited elsewhere |
What budget should I prepare for buying property in Estonia versus Latvia?
Your budget requirements differ significantly between Estonia and Latvia, with Estonia demanding higher upfront costs but lower ongoing expenses.
In Estonia, expect to budget €200,000-€400,000 for a decent apartment in Tallinn, while similar properties in Riga cost €100,000-€250,000. Transaction costs in Estonia include a 0.3% state fee plus notary fees of €150-€600, totaling around 1-2% of purchase price.
Latvia requires 1.5% transfer tax plus registration fees, making transaction costs around 2-3% of purchase price. However, the lower property prices mean your total cash requirement is substantially less.
For financing, both countries require 30-50% down payments for non-residents, but most foreign buyers purchase with cash due to limited mortgage access. Estonia's higher prices mean you need significantly more liquid capital available.
Budget flexibility matters more in Estonia due to limited inventory in popular areas, while Latvia offers more options within specific price ranges.
How do current property prices compare between Estonia and Latvia?
As of September 2025, property prices in Estonia are substantially higher than Latvia across all segments and locations.
Tallinn apartment prices average €3,084/m², with existing stock at €2,797/m² and new developments reaching €4,205/m². Secondary cities like Tartu average €2,800/m² and Pärnu €2,500/m², while rural areas drop below €1,800/m².
Riga presents much lower prices with existing apartments at €848-€853/m², though new developments range €2,640-€2,980/m². Premium properties command higher prices, but regional Latvian cities offer extremely affordable options, with Daugavpils at just €222-€475/m².
The price gap means you can purchase 2-3 times more space in Latvia for the same budget. However, Estonia's higher prices reflect stronger economic fundamentals and infrastructure development.
Price appreciation trends also differ, with Estonia showing steady 3-7% annual growth while Latvia experiences more volatility but recently saw 11% increases in new-build segments.
What are the tax implications and ongoing costs in each country?
| Cost Category | Estonia | Latvia |
|---|---|---|
| Property Tax | No building tax, €2-€5 per 1,000m² land tax yearly | 0.2-3% of cadastral value annually |
| Transfer Tax | 0.3% state fee | 1.5% of purchase price |
| Inheritance Tax | None | Varies by relationship |
| Gift Tax | None | Applicable in some cases |
| Annual Holding Costs | Very low | Higher, especially non-primary residences |
| Rental Income Tax | 20% flat rate | Progressive rates up to 31% |
How easy is property acquisition for foreigners in both countries?
Both Estonia and Latvia allow unrestricted foreign property ownership with minimal bureaucratic barriers, though Estonia offers a more digitized process.
Estonia permits any nationality to purchase property except some restrictions on agricultural and forestry land. The process is fully digital with transparent English-language registries, strata title availability, and streamlined documentation.
Latvia similarly allows foreigners to buy most property types with some agricultural land restrictions requiring permits. The legal process involves notarization and registry registration but requires more paperwork, especially in rural areas.
Both countries use transparent land registries, secure title systems, and standardized purchase contracts. Estonia's e-Residency program doesn't directly help with property purchase but facilitates digital document handling.
Processing times are typically 1-2 weeks in Estonia and 2-4 weeks in Latvia for standard transactions.
What financing options exist for foreign property buyers?
Mortgage financing remains challenging for non-residents in both countries, with most foreign buyers relying on cash purchases.
Estonian banks rarely lend to non-residents without local income proof or strong connections like Estonian company ownership or residence status. Available mortgages require 30-50% down payments with 4-6% interest rates for qualified applicants.
Latvia offers even more restrictive non-resident lending, with stricter due diligence requirements, 40%+ down payments, and higher interest rates than domestic loans. Most banks prefer not to lend to foreign buyers without substantial local ties.
Alternative financing through private lenders exists in both markets but comes with higher rates and shorter terms. Developer financing for new builds occasionally offers better terms but remains limited.
Cash transactions dominate the foreign buyer market, making liquid capital availability crucial for property acquisition in both countries.
Don't lose money on your property in Estonia
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What rental yields and vacancy rates can I expect?
Both countries offer similar gross rental yields of 4-6% in capital cities, though market dynamics and vacancy patterns differ significantly.
Tallinn rental yields range 4-6% gross for standard apartments, with higher returns possible through short-term rentals or smaller cities. Vacancy rates remain low in main Estonian cities but are rising slightly due to new construction supply.
Riga provides comparable 4-6% gross yields for standard apartments, with better returns in affordable housing segments. Smaller Latvian cities often offer higher yields but experience longer vacancy periods and reduced liquidity.
Estonia's rental market benefits from strong employment growth and limited housing supply, supporting consistent occupancy. Latvia's rental demand concentrates heavily in Riga with weaker fundamentals in secondary markets.
It's something we develop in our Estonia property pack.
How do long-term property value trends compare?
Estonia demonstrates more consistent long-term price appreciation with lower volatility, while Latvia shows higher growth potential but greater market swings.
Estonian property prices have grown steadily at 3-7% annually, remaining resilient post-pandemic with continued upward forecasts driven by urbanization, tech sector expansion, and rising incomes.
Latvia experienced significant growth in the last decade, particularly in Riga and Jūrmala, with new-build prices increasing 11% recently while existing stock remained flat or declined. Future projections suggest moderate stability and continued growth.
Estonia's smaller market size creates less volatility but also limits dramatic appreciation potential. Latvia's larger price variations offer higher returns but require careful timing and location selection.
Both markets benefit from EU membership, eurozone stability, and improving economic fundamentals, though Estonia shows more predictable patterns.
Which country offers better economic and political stability?
Both Estonia and Latvia maintain stable EU democracies with solid governance, though Estonia demonstrates stronger economic metrics and digital advancement.
Estonia features a highly stable political environment, advanced digital economy, robust governance systems, and projected 1-2% GDP growth for 2025. The country leads globally in digital government services and e-residency programs.
Latvia also maintains stable EU membership with recovering post-pandemic economics and GDP growth projected just above 2%. However, the economy shows greater vulnerability to EU-wide economic shocks and regional dependencies.
Both countries benefit from NATO membership, eurozone currency stability, and EU legal frameworks. Estonia's higher GDP per capita and more diversified economy provide additional stability factors.
Political risks remain minimal in both countries, with democratic institutions, press freedom, and rule of law well-established.
How strong are job markets and income growth in key areas?
Estonia offers superior employment opportunities and wage growth, particularly in technology and services sectors, while Latvia shows more uneven development patterns.
Estonia's job market features strong IT and services growth, rising wages, labor shortages in key fields, and high productivity growth. Tallinn and Tartu benefit from tech company presence and international business development.
Latvia shows good growth in Riga and export sectors but maintains lower wage levels than Estonia with uneven regional development. Income growth remains slower and more concentrated in the capital region.
Estonia's unemployment rates stay consistently lower with better prospects for high-skilled employment. The digital economy creates numerous remote work opportunities and international business connections.
Both countries face demographic challenges with aging populations, but Estonia's economic diversification provides better long-term employment stability and income growth potential.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Estonia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What lifestyle factors should influence my decision?
Estonia and Latvia offer distinct lifestyle experiences, with Estonia providing more digital integration and international connectivity while Latvia offers lower costs and cultural richness.
Estonia features a highly digital society with strong English fluency in cities, high-quality public healthcare, top-ranked education systems, and cosmopolitan culture in Tallinn. The country leads globally in digital government services and startup ecosystems.
Latvia provides vibrant cultural life in Riga, lower English proficiency outside tourist areas, improving healthcare systems, significantly lower living costs than Estonia, and less digital integration but rich historical architecture.
Climate conditions are similar in both countries, with cold winters and mild summers. Estonia offers better public transportation and infrastructure development, while Latvia provides more affordable daily living expenses.
Language barriers exist in both countries outside major cities, though Estonian society shows higher English adoption rates among younger populations.
How do residency and citizenship options differ?
Latvia offers direct investment-based residency opportunities while Estonia requires separate residence permit applications unrelated to property ownership.
- Estonia does not grant residency through property purchase and requires separate residence permit applications through business, employment, or study categories
- Latvia's golden visa program allows residence permits for real estate investments of €250,000 or more, with processing taking 2-5 months
- Estonian e-Residency provides digital identity but not physical residency or property ownership benefits
- Both countries offer pathways to citizenship after 8-10 years of legal residence with language requirements
- EU citizenship from either country provides full European Union mobility and settlement rights
How quickly can I resell property if needed?
Property liquidity varies significantly by location in both countries, with capital cities offering faster sales while rural areas present longer marketing periods.
Estonia provides fast resale opportunities in Tallinn and Tartu, typically 1-3 months for well-priced properties. Coastal and rural regions can require 6-12 months or longer due to limited buyer pools.
Latvia offers good liquidity in Riga and Jūrmala resort areas, with sales typically completing within 2-4 months. Smaller towns present slower sales, and Soviet-era apartments can be particularly difficult to sell.
Both markets benefit from transparent legal systems and efficient transfer processes once buyers are found. Estonia's smaller market size means fewer total transactions but more predictable pricing.
It's something we develop in our Estonia property pack.
Market liquidity depends heavily on property type, location, and pricing strategy, with premium properties in both capitals maintaining the highest resale speed.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Estonia offers superior long-term stability with minimal property taxes and strong digital infrastructure, making it ideal for investors prioritizing predictable returns and low ongoing costs.
Latvia provides more affordable entry points and golden visa opportunities, appealing to buyers seeking immediate residency benefits and higher potential returns despite increased taxation and market volatility.
It's something we develop in our Estonia property pack.
Sources
- Estonia Price Forecasts - InvestRopa
- Latvia Price Forecasts - InvestRopa
- Dwelling Price Index - Statistics Estonia
- Riga Price Forecasts - InvestRopa
- Tax Nuances in Baltic States - BDO
- Property Taxes in CEE and Baltic - OECD
- Estonia Tax Table 2023 - Roedl
- Pan-Baltic Tax Comparison - Grant Thornton
- Latvia Tax Analysis - RTA Journal
- Latvia House Price Index - Trading Economics