The reduction of state fees will encourage investment in the rental market and will allow real estate to be bought at a higher profit
Today, in the third reading, amendments to the Land Register Law were adopted in the parliament of Latvia, which supported the proposal of the parliament deputy Gatis Eglītis to make changes in the amount of state fees for consolidating apartment properties in the land register. The amendments will come into force on 1 July and allow the government to reduce the amount of state fees for an individual person from the currently set 2% to 1.5% of a property’s value, as well as for a legal entity from 6% to 2% of the property value. These changes will be a significant improvement in the competitiveness of the Latvian real estate market, while at the same time a significant benefit for the society by reducing the costs associated with the acquisition of property.
“Reduced state fees for consolidating property in the Land Register are valuable changes for every inhabitant of Latvia. If we assume that the average price of a new apartment is 100,000 euros, an individual person has to pay 2% or 2,000 euros to confirm the purchase, but in the future the fee will be only 1.5% or 1,500 euros. This provides savings of 500 euros for everyone who buys a home, thus stimulating activity in the real estate market. With the entry into force of the new rental regulation, it is necessary to encourage investments of legal entities, including investment and pension funds in rental houses and apartments. Although the property consolidation fee in Latvia will still be higher than in neighbouring countries, this step will definitely make the investment environment more attractive and will promote the arrangement and growth of the rental market, ”says Mārtiņš Vanags, Chairman of the Board of the Alliance of Real Estate Developers.
The amounts of state fees set so far for the registration of property rights in the Land Register for a physical or legal entity have been disproportionately high and have slowed down the development of the Latvian economy. For comparison, so far in Latvia the property purchase transaction tax was 2% of the property value for a natural person and 6% for a legal entity. Meanwhile, in neighbouring countries, the mandatory costs associated with the purchase of real estate are significantly lower - in Lithuania 0.45% of the transaction value, in Estonia about 0.4% of the transaction value. The fee rates set in Latvia so far in some cases even exceed 100 times the amount that must be paid in neighbouring countries for an identical procedure, therefore the adopted amendments in the sector have been expected for a long time to create a more attractive environment for investors and buyers.
About the NĪAA
The Alliance of Real Estate Developers (NĪAA) brings together the most significant players of the industry in order to achieve the sustainable development of the real estate industry, represent it in a collective manner on a state and local government level, as well as emphasise the role of real estate developers and investors within the economy of Latvia.
For further information:
Mārtiņš Vanags - Alliance of Real Estate Developers (NĪAA)
martins.vanags@niaa.lv“Reduced state fees for consolidating property in the Land Register are valuable changes for every inhabitant of Latvia. If we assume that the average price of a new apartment is 100,000 euros, an individual person has to pay 2% or 2,000 euros to confirm the purchase, but in the future the fee will be only 1.5% or 1,500 euros. This provides savings of 500 euros for everyone who buys a home, thus stimulating activity in the real estate market. With the entry into force of the new rental regulation, it is necessary to encourage investments of legal entities, including investment and pension funds in rental houses and apartments. Although the property consolidation fee in Latvia will still be higher than in neighbouring countries, this step will definitely make the investment environment more attractive and will promote the arrangement and growth of the rental market, ”says Mārtiņš Vanags, Chairman of the Board of the Alliance of Real Estate Developers.
The amounts of state fees set so far for the registration of property rights in the Land Register for a physical or legal entity have been disproportionately high and have slowed down the development of the Latvian economy. For comparison, so far in Latvia the property purchase transaction tax was 2% of the property value for a natural person and 6% for a legal entity. Meanwhile, in neighbouring countries, the mandatory costs associated with the purchase of real estate are significantly lower - in Lithuania 0.45% of the transaction value, in Estonia about 0.4% of the transaction value. The fee rates set in Latvia so far in some cases even exceed 100 times the amount that must be paid in neighbouring countries for an identical procedure, therefore the adopted amendments in the sector have been expected for a long time to create a more attractive environment for investors and buyers.
About the NĪAA
The Alliance of Real Estate Developers (NĪAA) brings together the most significant players of the industry in order to achieve the sustainable development of the real estate industry, represent it in a collective manner on a state and local government level, as well as emphasise the role of real estate developers and investors within the economy of Latvia.
For further information:
Mārtiņš Vanags - Alliance of Real Estate Developers (NĪAA)