All sources have been thoroughly verified for credibility. Furthermore, an industry specialist has reviewed and approved the final article.
Everything you need to know is included in our Latvia Property Pack
Latvia, with its stunning landscapes, vibrant cultural heritage, and warm-hearted locals, attracts numerous foreigners seeking real estate investment opportunities.
However, navigating the intricacies of purchasing property in a foreign land can be challenging, particularly concerning the legal framework and regulations involved.
That's why this guide is here to help! We'll explain how the property market works in Latvia in a simple and easy-to-understand way, covering everything you need to know.
Also, for a more in-depth analysis, you can check our property pack for Latvia.Can you purchase and own a property in Latvia as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Latvia for US citizens.
Buying real estate in Latvia as a foreigner involves understanding several key aspects, which are distinct from those applicable to local buyers.
Firstly, it's important to note that foreigners can indeed purchase property in Latvia. This includes both residential and commercial real estate. However, when it comes to owning land, there are certain restrictions. Foreigners are generally allowed to own land, but with some limitations
For example, agricultural and forest land can be more challenging to acquire, and in some cases, it may be off-limits to non-residents or non-EU citizens.
The rights of foreign real estate owners in Latvia are largely similar to those of local citizens.
Once you own a property, you have the same rights over it as a Latvian citizen would. This includes the right to sell, lease, or develop the property, within the bounds of Latvian law.
Regarding the rules based on your country of origin, there are some distinctions. EU citizens, for example, usually face fewer hurdles compared to non-EU citizens. For non-EU buyers, the process might involve additional paperwork and possibly more scrutiny.
Residency is not a prerequisite for buying property in Latvia. You don't need to live in the country to own real estate there. This makes it a viable option for investors or those looking for a second home.
Regarding visas and permits, buying a property in Latvia does not automatically entitle you to a residence permit.
However, there are certain investment programs where purchasing real estate might contribute towards obtaining a residency permit under specific conditions. It's always wise to check the current regulations or consult with a legal expert in this regard.
There's no overarching requirement for specific authorization from a governmental institution to buy property as a foreigner.
The process does involve standard property-buying procedures like any real estate transaction, such as dealing with the Land Registry and ensuring all legal requirements are met.
In terms of investment minimums, Latvia does not generally impose a minimum investment requirement for foreign buyers.
If you are pursuing a residence permit through real estate investment, there might be minimum investment thresholds to meet.
Can you become a resident in Latvia by purchasing and owning a property?
Latvia does offer a residency-by-investment program, often referred to as the "Golden Visa" program, which includes investing in real estate as one of the pathways to residency.
This program is designed to attract foreign investment and, in return, grants the investor the right to reside in Latvia. Here's how it works and what you need to know about it.
The basic premise is that by making a substantial investment in Latvian real estate, you can qualify for a temporary residency permit. This program is especially popular among non-EU nationals seeking to gain a foothold in the European Union.
The minimum investment amount is a key factor. To qualify for the residency program, you need to invest a certain amount in Latvian real estate.
This amount was set at €250,000 plus a 5% state fee based on the property value. However, these figures are subject to change, so it's crucial to verify the current requirements.
In terms of the property itself, there are no specific restrictions on the type of real estate you can purchase. It can be residential or commercial property.
However, there are due diligence processes to ensure the legality and transparency of the transaction.
Once you've made the investment and your application is approved, you'll be granted a temporary residency permit. This permit is typically valid for a period of five years. During this time, you're required to maintain your investment in Latvia.
This residency permit is renewable, provided you continue to meet the investment requirements. It's important to note that this is not permanent residency, but it can be a step towards it.
After a certain period of continuous residency in Latvia, you may become eligible to apply for permanent residency.
Regarding citizenship, holding a temporary residency permit through the real estate investment scheme can eventually lead to eligibility for Latvian citizenship.
This usually requires a longer period of continuous residency, proficiency in the Latvian language, and a demonstration of ties to the Latvian community and culture.
The popularity of the program varies, with several hundred to a few thousand individuals taking advantage of it since its inception. The exact number of users changes over time as policies and economic conditions evolve.
Thinking of buying real estate in Latvia?
Acquiring property in a different country is a complex task. Don't fall into common traps – grab our guide and make better decisions.
Market data
You can find fresh and updated data in our pack of documents related to the real estate market in Latvia.
By examining the the the GDP per capita indicator, we can deduct that Latvian people have become 8.9% richer throughout the past 5 years.
As people's wealth grows, the demand for real estate could rise, resulting in potential price increases down the road.
Looking at the data reported by Numbeo, we can see that rental properties in Latvia offer gross rental yields between 2.8% and 5.5%.
These moderate rental yields indicate a balanced return on investment for property owners or investors
To know more, you can also read our dedicated article: is it a good time to buy a property in Latvia?
Daily life of an expat
Living as an expat in Latvia can be a rewarding experience.
The country is known for its stunning natural beauty and vibrant culture. The people are friendly and welcoming, and the cost of living is relatively low. There is a wide range of activities to enjoy, from outdoor activities like hiking and skiing to cultural events like music and theatre.
The capital city, Riga, is a vibrant and modern metropolis with plenty of attractions, restaurants, and nightlife. Expats will find plenty of opportunities to meet people and make new friends.
Latvia also offers excellent healthcare and education, making it an attractive destination for expats looking to start a new life abroad.
What are the best places to purchase a property in Latvia?
This table summarizes some of the best places to buy a property in Latvia.
| City / Region | Population | Average Price per sqm (EUR) | Strengths |
|---|---|---|---|
| Riga | ≈ 632,000 | 1,000 - 2,500 | Capital city, cultural and economic center, historical architecture |
| Jūrmala | ≈ 56,000 | 1,500 - 3,000 | Seaside resort, white sandy beaches, spa and wellness facilities |
| Vecrīga (Old Riga) | N/A | 2,000 - 4,000 | Historical center, UNESCO World Heritage Site, cobblestone streets |
| Ķīpsala | N/A | 1,500 - 3,500 | Island neighborhood, river views, luxury housing options |
| Sigulda | ≈ 10,000 | 800 - 1,500 | Nature lover's paradise, Gauja National Park, medieval castles |
| Cēsis | ≈ 17,000 | 800 - 1,500 | Historical town, medieval castle ruins, cultural events |
| Daugavpils | ≈ 80,000 | 400 - 1,000 | Second-largest city, cultural diversity, fortress, Mark Rothko Art Center |
Do you need a lawyer to buy a property in Latvia?
When purchasing a property in Latvia, engaging a local lawyer can provide valuable assistance in navigating the legal aspects and ensuring a successful transaction.
One crucial document they can help you with is the Purchase Agreement (Pirkuma Līgums), a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Latvian lawyer can also assist with conducting a Land Registry Search (Zemesgrāmatas Izraksts) to verify the property's ownership status and identify any potential legal issues or encumbrances.
Furthermore, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local Land Registry or relevant authorities.
They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Notary Fees, are paid correctly and in compliance with Latvian laws and regulations.
What are the risks when purchasing a property in Latvia?
We've got an article dedicated to the risks associated with purchasing property in Latvia.
When buying a property in Latvia, there are some specific risks to be aware of that differ from other countries.
One risk is the potential for property tax increases. Property taxes in Latvia are set by local governments and can be subject to change. Buyers should be aware of the current tax rate in the area they are buying in and the potential for any future increases.
Another risk is the potential for fraud. While there are laws and regulations in place to protect buyers, there is still a risk of being scammed or having a property misrepresented. It is important to conduct due diligence and research any potential purchases thoroughly before committing to a purchase.
Finally, there is a risk of being unable to obtain a mortgage. Foreign buyers may not be eligible for a mortgage in Latvia, which can make it difficult to purchase a property. It is important to research the local banking and mortgage regulations before committing to a purchase.
Everything you need to know is included in our Latvia Property Pack
What are the documents needed for a real estate transaction in Latvia?
When buying a property in Latvia, the following documents are typically required:
1. A copy of the property deed.
2. A statement of the seller's title to the property.
3. A copy of the purchase agreement.
4. A copy of the building plan.
5. A copy of the land register.
6. A copy of the zoning plan.
7. A copy of the property tax assessment.
8. A copy of the property insurance policy.
9. A copy of the mortgage deed.
10. A copy of the registration of ownership.
We review each of these documents and tell you how to use them in our property pack for Latvia.
What strategies can you use for successful negotiations with Latvians?
Here are some recommendations for negotiating effectively with locals when buying property in Latvia, taking into account Latvian culture:
Value punctuality: Latvians place high importance on being punctual. Arrive on time for meetings and respect agreed-upon deadlines to demonstrate professionalism and reliability.
Emphasize respect and formality: Latvian culture values respect and formalities. Address individuals using their appropriate titles and surnames unless invited to use first names. Maintain a polite and respectful tone throughout the negotiation process.
Build trust through competence: Latvians appreciate competence and expertise. Demonstrate your knowledge and qualifications related to the property, as it will help build trust and credibility during negotiations.
Show interest in local history and traditions: Latvians have a rich cultural heritage. Display genuine curiosity and interest in Latvian history, traditions, and customs. This will help foster a positive connection and create a more conducive negotiation environment.
Focus on thoroughness: Latvians tend to approach negotiations meticulously. Be prepared to provide detailed information and documentation about the property, such as its history, legal status, and any potential risks or benefits.
Practice active listening: Latvians appreciate attentive listeners. Show genuine interest in the opinions and concerns of the other party. Take time to listen and respond thoughtfully to create an atmosphere of mutual understanding.
Seek consensus: Latvian culture values consensus and finding mutually beneficial solutions. Instead of employing aggressive tactics, focus on finding common ground and compromises that satisfy both parties' interests.
Consider long-term relationships: Latvians often prioritize long-term relationships over short-term gains. Emphasize building a strong and trustworthy partnership for future collaborations beyond the current negotiation.
Engage in social bonding: Socializing outside of formal negotiations can help strengthen relationships. Consider inviting your negotiation counterpart for a meal or engaging in informal activities to establish a personal connection.
Collaborate with local experts: Engage the services of local professionals, such as lawyers or real estate agents, who have a deep understanding of Latvian culture, regulations, and market conditions. Their expertise can provide valuable guidance throughout the negotiation process.
Can foreigners obtain a bank loan in Latvia?
Yes, foreigners can obtain property loans in Latvia. The Latvian banking system allows non-residents to apply for property loans, subject to certain conditions and requirements.
If you're a foreigner looking to get a property loan in Latvia, you'll typically need a valid residence permit, evidence of income or employment, and meet the specific requirements of the lenders.
Some banks in Latvia that can grant mortgages to foreigners include Swedbank Latvia, SEB Banka, and Citadele Banka.
Additionally, in Latvia, mortgage rates for a 20-year term range between 1% and 5%, presenting borrowers with favorable conditions for securing financing.
What are the taxes related to a property transaction in Latvia?
Here is a breakdown of taxes related to a property transaction in Latvia.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Value Added Tax (VAT) | Tax on the sale of newly built properties | 21% of the property value | Buyer |
| Capital Gains Tax | Tax on the capital gain from the sale of a property | 20% on the net capital gain (the difference between the sale and acquisition prices) | Seller |
| Property Tax | Annual tax on the property value | A progressive rate of 0.2% to 0.6% of the cadastral value of the property | Owner |
| Rental Income Tax | Tax on rental income generated from the property for non-resident | Ranges from 20% to 31% of the rental income after deduction of expenses | Owner |
| Stamp Duty | A tax imposed on the transfer of real estate property | 2% on either the sale price or the cadastral value of the property, whichever is higher | Buyer |
What fees are involved in a property transaction in Latvia?
Below is a simple breakdown of fees for a property transaction in Latvia.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| State Fee | Fee for the registration of real estate property rights in the Land Register | 1.5% to 2% of the property purchase price or the cadastral value, whichever is higher | Buyer |
| Fee charged by the notary for their services in the property transfer process | Fee charged by the notary for their services in the property transfer process. | Typically 0.5% of the property sale price | Buyer |
| Real Estate Agent Fee | Fee charged by real estate agents for their services | Varies from 2% to 5% of the property purchase price | Seller |
-Buying property as a foreigner in Lithuania: the guide
Buying real estate in Latvia can be risky
An increasing number of foreign investors are showing interest in Latvia. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.