Real Estate Guide 2015: Purchasing real estate in Latvia / Part 2
Part 2
Real estate payment
This process can be selected and determined by the Parties. For example: the purchase price is paid at the moment of signing contract; partial payment of the purchase price before and after corroboration of the property rights in the Land Book register.
The safest and most common way of the payment is payment using the Escrow account. Money is transferred to the special bank account, and after the Buyer's property rights are registered in the Land Book registry, bank transfers the money to the Seller.
Real estate payment of taxes and fees
The Seller (in case the real property has been in his possession less than 5 years and the apartment
was not declared as the place of residence for 1 year) has to pay the personal income tax 23% of the
profit of the sale of the real estate.
The Buyer has to pay the state and stamp duties for recording the property rights in the Land Book register.
The State duty for the purchase transaction is 2% of the value of the real property.
If the cadastral value of the property is higher than the value established in the Purchase agreement, the duty shall be paid from the highest sum.
The Stamp duties are: EUR 14 for the right corroboration in the Land Book registry and EUR 7 for the Land Book certificate.
In case of purchase of the land plot, the Buyer has to pay attention to above mentioned and additional factors.
When buying a land plot, the Buyer has to find out if this particular land plot suits for Buyer`s purposes. The status of the land plot has to be determined, is it allowed to build on it, are there any red lines, servitudes and communications, whether local governments have the right of first refusal.
The attention must be paid to the following documents:
a) Planning and architecture assignment - document issued by the Construction board and is the basic document for development of construction plan,
b) Land boundary plan - a document that reflects the land size, servitudes, communications and red lines and land status,
c) Land Book certificate - in this document are established the property rights and encumbrances of the land plot.
Conveyance of the property
After the purchase of the property, the deed of conveyance shall be signed regarding the conveyance of the real estate from the Seller to the Buyer.
If you want to read the articles first part, please click here.
For more information regarding the sale or purchase of real estate in Latvia, please contact our English speaking attorneys and tax consultants to info@gencs.eu.
T: +371 67240090
F: +371 67240091