ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN LATVIA]

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transaction amount, whichever is higher. The state duty for the consolidation of property rights in the Land Registry for each real estate is set at the following amount (but no more than 50,000 euros): - 1.5% of the value of the real estate (euro), if the property rights are acquired by a private individuals on the basis of a contract or a court decision to approve the statement of auction, or on the basis of a court decision on registering ownership rights to the real estate to a bidder, co-owner, or creditor; Two percent of the value of the real estate (euro), if the property rights are acquired by a legal entities on the basis of a contract or a court decision to approve the statement of auction, or on the basis of a court decision on registering ownership rights to the real estate to a bidder, co-owner, or creditor; - Three percent of the value of the real estate (euro), if the property rights are acquired on the basis of a gift agreement; - One percent 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) 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. 2) 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 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.

ILN Real Estate Group – Buying and Selling Real Estate Series

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