Buying Property in the Baltic States?
Great info about buying Baltic States property!

Historically, the Baltic States have not been particularly open to foreign investment. However, since the fall of Communism, the Baltic States’ capital cities have been listed as UNESCO world heritage sites and external investors have flooded to the region to try and get a slice of the action.

In the last 12 months, the GDP per capita of each of the Baltic States has grown by more than the other 25 European countries, which has spurred investors from across the globe to put their money into one or more of the Baltic States hotspots.

When investors ask how to buy property in the Baltic States, they are often met with a surprising response – very easily. Believe it or not, the house buying process is actually very simple in the Baltic, mainly because there are very few chains and it is currently a market built up of more first time buyers than in other more developed markets.

Despite the simplicity of the purchasing process, it is still vital that a foreign investor has an English speaking solicitor who will ensure that investors understand exactly what they are purchasing and can guide those who are unfamiliar with the processes in the country.

Buying Property in the Baltic States

One of the things that should be considered is the role of the notary. A notary is a government employee who simply registers the transaction; he or she is not there in a solicitor capacity. This distinction is vital, as in the UK a solicitor would register the transaction and therefore it is easy for a UK investor to assume that a foreign notary is simply carrying out the same role as a UK solicitor. This is not the case and a notary will not be able to offer any legal advice to either purchaser or seller.

Once an investor has found a property that they are interested in, they then put an offer to purchase to the estate agent that is advertising the property. Some agents, and in particular those dealing with new build properties, will request a £1,000 reservation fee. This reservation fee will form part of the estate agent’s commission which is normally around 3 percent of the property price. This fee will, however, be met buy the seller.

Purchasers will be liable for the 2 percent purchase tax that will have to be paid before the change of ownership can be registered. There will also be notary fees, land registration fees, calculation fees, bank fees and insurance costs that will amount to around £700, although this depends on the type of property and many off plan sellers may cover this cost for purchasers, as an inducement to attract investors.

Other than a slightly quicker purchase process, it is very similar to the process used in the UK. After a purchase price has been agreed, searches and surveys are completed and contracts are then exchanged, with 10 percent deposits paid. Completion then occurs after the registration fees are paid and the notary registers the change of ownership. Due to the typical speed of purchase in the Baltic States, it is not uncommon for exchange and completion to happen either on the same day, or within a day or two.

As with any foreign purchase, it is important that potential purchasers obtain local, independent advice to ensure that all purchases go smoothly and that investors understand the contract into which they are entering.

Property investors will be pleasantly surprised at the ease and speed with which they can achieve their property dream!