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Startpage»  Property in Bulgaria - Legal Aspects - Property buying process details |
Properties in Latvia. How to buy and their price. |
Laws and taxes
There are no restrictions upon foreigners wishing to buy and sell property in Latvia. A foreigner can also buy land, but approval is needed from the local municipality. Upon purchase of property the buyer must pay a 2% property title transfer fee to the property register. The notary fee is fixed at between 300-450 Euros. There is no capital gains tax on properties that have been privately owned for more than a year. If owned for less than a year the capital gains tax is 25%. Property tax is 1.5% annually of the cadastral value of the land and the buildings on it.
THE BARGAINS ON PURCHASE OF THE IMMOVABLE PROPERTY, WHEN ONE OF THE PARTIES OF THE BARGAIN IS NON-RESIDENT OF THE LATVIAN REPUBLIC.
As a result of land reform of the Latvian Republic it became possible to purchase of the immovable property by non-resident of the LR, in this connection the given persons can act by the party of the bargain on purchase of the immovable property, but there are some restrictions on purchase of the real estate in the property. Non-resident of LR can not get the rights on the property of the following land:
- land located in state boundary zones;
- land at coast of the Riga gulf and in dune zone of the Baltic sea, together with other land in protective zone of public reservoirs and rivers, excepting cases, when in these places the reorganization is stipulated according to the urban plan of development;
- agricultural and forestry grounds according to the plans of development of city.
The general rules, how non-residents can get land in the property, including real estate (land and buildings, construction on them), are following:
Having concluded the contract of purchase, non-resident submits this contract together with the application, in which the purposes of purchase and character of further use of the real estate are specified, which corresponds to the plan of development of city (volost), in local self-management (city dome or council of volost), which chief (the chairman of the dome or council) has no right without the lawful reason to give up in purchase of land in property.
The refusal can be only in cases, if the purpose of use of land contradicts the purpose determined in the plan of development. The consent about purchase of land in property or refusal, the chief of self-management should give to non-resident within 20 days from the moment of reception of the application of non-resident.
It is possible to appeal against refusal in purchase of land in the property in court.
A privatization:
Non-residents, wishing to get in property the real estate by privatization, first of all should make sure of, whether they have right on purchase of the privatization (compensatory) certificates. Also, privatizing real estate, it is necessary to take into account , that SJSC «Agency of privatization » itself names the purposes and character of use of privatized land, that is reflected in rules of privatization.
1. The taxes:
the taxes to the real estate in the LR are obliged to pay all proprietors, legal owners, users and tenants of the real estate. The interest rate makes 1,5 % from cadastral cost of property. Since 01.01.2002 the tax rate is 1 % from cadastral cost of property.
2. Surtax from the enterprises
In cases, if non-resident of the LR the legal person (further - firm), which has got in property the real estate in the LR and wants to sell it or in any way to alienate it and, as a result of alienation, the income will appear, and it is the resident of one of the herein provided states, then, guided by the international agreements and conventions made with the Latvian Republic, it has the right to pay surtax in a place of registration in the country - domicile:
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1. USA |
7. Denmark |
13. Lithuania |
19. Switzerland |
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2. Great Britain |
8. France |
14. Norway |
20. Uzbekistan |
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3. Netherlands |
9. Greece |
15. Poland |
21. Germany |
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4. Austria |
10. Estonia |
16. Portugal |
22. Vietnam |
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5. Canada |
11. China |
17. Finland |
23. Sweden |
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6. Czechia |
12. Izrael |
18. Spain |
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Besides non-residents of already mentioned jurisdictions, according to the interstate agreements on protection of joint investments received from alienation of immovable property, it is possible free and freely to repatriate income, from the LR.
As well as in cases, when between Latvia and state of registration of non-resident the convention on avoidance of the double taxation is cocluded, non-residents, paid the tax to their state, which interest rate is lower, than appropriate tax rate in Latvia, have an opportunity to give in the appropriate branch of State tax service of Latvia the information from the appropriate fiscal service of the country of registration.
The rate of the tax for non-resident, receiving compensation from alienation of the immovable property in Latvia, makes 2 percents from the sum of the received compensation.
3. The surtax from the population
According to the law « About surtax from the population » the tax is not necessary to pay, if the income is received from sale of belonging to non-resident - physical person real estate, which was in the property of non-resident not less than 12 months (from the moment of record of the property right in the Land book).
In cases, when the income from sale of real estate which was in the property of non-resident - physical person less then 12 months, the rules about payment of the tax from the incomes of the enterprises concerning to non-residents are applied.
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