The amendments to the Land Register Law adopted by the Saeima envisage reducing the amount of the state fee for a natural person from the currently set 2% to 1.5% of the property value, while for a legal person for consolidating an apartment property from 6% to 2% of the property value.
“Reduced state fees for consolidating property in the Land Register are valuable changes for every inhabitant of Latvia. Assuming that the average price of a new apartment is 100,000 euros, a natural person had to pay 2% or 2000 euros for consolidating a purchase, but in the future the fee will be only 1, 5% or € 1,500, a real saving of € 500 for anyone buying a home, boosting activity in the real estate market, while a reduction in fees will boost investment in rental housing and apartments for legal entities, including investment and pension funds, along with the new rent regime. Although the property consolidation fee in Latvia will still be higher than in the neighboring 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 Real Estate Developers Alliance.
The amounts of state fees set so far for the registration of property rights in the Land Register for a natural or legal person have been disproportionately high and have slowed down the development of the Latvian economy. For comparison, in Latvia so far the property purchase transaction tax was 2% of the property value for a natural person and 6% for a legal person. Meanwhile, in neighboring 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 neighboring countries for an identical procedure, therefore the adopted amendments in the sector have long been expected to create a more attractive environment for investors and buyers.
Amendments to the law will enter into force on July 1
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