We respect your privacy.

However, this website will sometimes use cookies in order to utlize specific uses from third-party sites. If you agree with these guidelines, please click the button bellow.
Or you can customize how cookies are used here : Manage your cookies

The Common Legal Issues in Estonia’s Real Estate

September 13, 2022
Want to invest in a property in Estonia? Then you better prepare yourself. This isn't going to be easy! At the very least, you ought to know about the legal issues that are common in Estonia's real estate. You wouldn't want to get into trouble, would you? And if you proceed with the process without knowing anything, you can get into real trouble really quickly. What will happen to all the money you were going to spend then? Down the drain! You can avoid all of that by knowing a little about the legalities that surround real estate in Estonia. A and B are just a few good examples.

The Common Legal Issues in Estonia’s Real Estate

Can Foreigners Buy Property in Estonia?

When exploring the idea of purchasing real estate in Estonia, the first question that comes to mind is if you, a foreigner, are even allowed to own property here. The answer is, yes, you can be. But it's not as automatic as those in other countries like France or Spain. Here in Estonia, you need to get permission from the local authorities before you can buy a property in the area. The process itself is pretty straightforward, but depending on what the local authorities are currently working on, it may take some time.

Certain Properties in Estonia That Are Harder to Buy

As already mentioned, getting permission to buy a property in Estonia is a pretty straightforward process. However, the same couldn't be said for certain parts of the country. For instance, if you plan to acquire agricultural land or forest land in Estonia, you need to get permission from the county government. And that's a whole different process that's slightly more complicated. It can take you longer to get this done. Meanwhile, foreigners aren't allowed to purchase properties on the smaller islands of Estonia as well as in the areas that border Russia.

The Common Legal Issues in Estonia’s Real Estate

The Important Costs in The Process

Paying the important costs is part of what will make dealing with real estate in Estonia a legal process. If you're buying a property here, you'll have to pay stamp duty, VAT, notary fees, and your real estate agent fees. Not to mention a few mortgage costs too. Luckily, many of these are paid via the final price of the property. On the other hand, if you're selling your place in Estonia, the required costs include the notary fees, real estate agent fees (if you hired one), and income tax. The latter has a standard tax rate of 20% and is imposed on the profit you earn from the sale.

Drawing Up and Signing The Pre-Purchase Protocol

Now, when it comes to drawing up the pre-purchase protocol, which is essentially the sale & purchase agreement, you need to get involved. It's in your best interest to include terms and conditions that will allow you to bow out of the agreement in light of certain situations. This is very important because once you sign the document, it will legally bind you to the sale. For buyers, you'll have to pay a 10$ deposit to the seller. For sellers, you'll have to take the property off the market and only sell it to the listed buyer.

The Common Legal Issues in Estonia’s Real Estate

The Property Ownership Structures in Estonia

According to Cee Legal Matters, there are many ownership structures when it comes to real estate in Estonia. Of course, there's full ownership, which reserves all the rights of the property to the listed owner. As well as joint ownership, wherein the ownership rights are equally divided among multiple owners. There's also the right of superficies. In this structure, the ' superficiary' has the right to acquire buildings, constructions, and even plants that are located on a property owned by someone else. And the right of preemption, which is a contractual right for one to purchase a property before it's put on the market.

The Legal Transfer of Ownership in Estonia

In other countries, the process of transferring a property's ownership is as simple as changing the name on the title deed. But here in Estonia, it's a little bit different. For one thing, there's no such thing as a property deed here. In order to become the new owner of Estonian real estate, you have to apply for the transfer of ownership in the Land Register. And this process usually takes around 65 days, approximately two months. You'd better be quick about it if you want to get your hands to your new place as soon as possible.

The Common Legal Issues in Estonia’s Real Estate

It's not exactly wise to be dealing with real estate in Estonia without knowing the legal issues that come with the process. You can easily get into a lot of trouble just by committing one mistake. All that hard work and money would've been for nothing.

#legal-issues   #real-estate-laws   #advice