ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN LATVIA]

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- 3% of the value of the real estate (euro), if the property rights are acquired on the basis of a gift agreement; - 1% of the amount of investment of real estate that be invested in the share capital of the capital company (euro) if real estate is invested in the share capital of the capital company. The ratio of 1.5 is applied to the state duty, if more than 6 months have passed, starting from the day of signing the document that confirms the rights to be registered. Costs for the re-registration of the title with the Land Registry, including notary fees, are usually covered by the buyer, or equally divided between both the seller and the buyer, however, the seller usually bears the costs of deleting of the existing mortgage on the real estate, if any. The seller should also pay the real estate tax for the entire year of the transaction, and no ownership will be transferred until the real estate tax is paid. VIII. OTHER INFORMATION A. Rights of first refusal The rights of first refusal are priority rights to purchase a real estate if the owner sells the real estate. 1) Local government rights of first refusal In case of alienation of the real estate, a local government shall have the rights of first refusal of the real estate if the real estate is necessary for performance of local government functions. The local government decision on exercising its rights of first refusal or on refusal to exercise its rights of first refusal is adopted within 20 (twenty) days after submission of

the copy of the purchase agreement to the local government. The local government rights of first refusal shall not apply to the following real estates: - production objects with all their accessories; - real estate, from which an undivided part has been alienated and which remains in the joint property of the seller and the purchaser; - real estate that is being sold through voluntary or compulsory auction; - real estate, to which third parties have the rights of first refusal or redemption rights based on the law, agreement or will. 2) Joint owners’ rights of first refusal If any of the joint owners of the real estate alienates its undivided share ( please see Section V. (B) ) to a person, who is not a joint owner, then the other joint owner(s) shall have the rights of first refusal. A joint owner is entitled to express the will to exercise its rights of first refusal within a 2 (two)-month period as from the receipt of the purchase agreement. But, if by the fault of the seller, the joint owner is not able to exercise the rights of first refusal, such joint owner will have the redemption rights, namely, within a period of 1 (one) year as from the registration of the acquirer’s title to the real estate with the Land Registry, the joint owner will be entitled to claim for acquisition of the real estate, by taking precedence over the acquirer and by assumption of the rights of the acquirer. 3) Rights of first refusal in case of divided property In case of divided property (please see Section V. (C)), the owner of the land and the

ILN Real Estate Group – Buying and Selling Real Estate Series

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