ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN LATVIA]

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owner of building (structure) have mutual rights of first refusal and redemption rights, if the respective land or building estate is alienated. The rights of first refusal shall not apply if the building (structure) is built based on the build-up rights. 4) Other rights of first refusal Rights of first refusal can be established also by the agreement or will. The law also provides for other specific cases when third parties have the rights of first refusal or redemption rights to real estate, for example, if the real estate is alienated in the territory of a civil aviation aerodrome of the state significance (also the territory necessary for further development thereof) and the civil aviation aerodrome is owned by a capital company where the state has a decisive influence – the state has the rights of first refusal, but if the civil aviation aerodrome is owned by a capital company, where the local government has a decisive influence – the respective local government has the rights of first refusal, or rights of first refusal to the real estate in the territory of the port may be exercised by the local government, represented by the port authority, but the rights of first refusal to the real estate in the territory of the port of Riga shall be exercised by the port authority of Riga as a derived public person and in the territory of the port of Ventspils shall be exercised by the port authority of Ventspils as a derived public person. A. Permitted use of the real estate (zoning) and environmental protection regulations Prior to the acquisition of real estate, the permitted use of the real estate (zoning) and possible restrictions for the usage, including construction, of the real property should be additionally reviewed in the local government

spatial plan and Territory Usage and Build up Regulations. Prior to the acquisition of real estate, it should also be reviewed whether the territory of the real estate is not registered with the Register of Polluted and Potentially Polluted Areas. However, it should be noted that, even if the territory of the real estate has not been registered as polluted or potentially polluted, depending on the historical usage of the respective real estate there is a risk that historical pollution may appear. IX. ANNUAL COSTS FOR PROPERTY OWNERSHIP A. Property Insurance Property Insurance is not mandatory, but very common. When property is purchased through loans by banks or other financial institutions, the lender requires the buyer to insurance. The buyer, a private individual, may be insurance against unemployment and incapacity for work, if it is demanded by financial institutions, which may be enforced contractually but is not

legally mandatory. B. Real Estate Tax

Real estate tax is levied on a property’s assessed value. Real estate tax is payable for land and buildings, and certain infrastructure. It is an annual tax but can be paid in four installments in March, May, August, and November. The local municipalities are free to set tax rates on real estate in their area from 0.2% to 3% of its cadastral value, otherwise tax rates defined by state apply. A tax rate exceeding 1.5% of cadastral value may be charged only if the real estate is improperly maintained.

ILN Real Estate Group – Buying and Selling Real Estate Series

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