From 1 July, state fees for registration of property rights in the Land Register will decrease
Today, the Cabinet of Ministers approved amendments to the regulations on the state fee for registration of property rights in the Land Register. The amendments that will come into force already from 1 July of this year, anticipate the reduction of the amount of the state fee for a physical entity from the currently set 2% to 1.5% of the property value, while for a legal entity for the registration of an apartment property, from 6% to 2% of the property value. These changes are a significant improvement in the competitiveness of the Latvian real estate market, while at the same time a significant benefit for society by reducing the costs associated with the acquisition of property.
"We are pleased that the opinion and arguments of the industry have been heard, and the amendments to the Land Register Law will take effect from next month. The reduction of state fees will bring real benefits to both legal entities, promoting growth in the rental market, and physical entities, allowing every inhabitant of Latvia to save on average 500 euros[1] in the process of buying a new apartment. At the same time, it will make Latvia's real estate environment more competitive and attractive compared to neighbouring countries, thus attracting greater investor interest. On behalf of the industry, I would like to thank Gatis Eglītis for the work done on the amendments to the Land Register Law,” emphasizes 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 physical entity 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, and 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.
[1] Assuming that the average price of a new apartment is 100,000 euros, a physical entity had to pay 2% or 2000 euros to confirm the purchase, but in the future the fee will be only 1.5% or 1500 euros.