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Buying Property in Estonia: Our Real Estate Guide

September 19, 2022
Out of all the places in the world, you probably thought that Estonia would be the last country where you'll purchase some real estate. This isn't to say that the destination itself is bad. Actually, it's criminally underrated! But buying property in Estonia is like buying one in France, Italy, or Spain. Nevertheless, real estate here is a good investment. And if you want to get in on the action, you need to know what to do first. What are the steps to take to purchase real estate in Estonia? What are the costs you have to face? This real estate guide will answer these questions!

Buying Property in Estonia: Our Real Estate Guide

Can a Non-Resident Buy A Property in Estonia?

Generally speaking, foreigners are allowed to purchase real estate in Estonia. But the protocol here isn't as simple as those in other countries. You're not automatically allowed to buy a property in Estonia when you're a non-resident. Instead, you have to get permission from the local authorities. The process is straightforward enough, but depending on how busy the local offices are at the time, there's no telling how long it will take. Nevertheless, once you've gotten their permission, you can freely purchase any real estate in their area. It's that simple!

What Should You Look For in a Property?

There are many things you have to look for in a property, whether it's in Estonia or anywhere else. Remember that you will be investing a lot of money into this purchase. It's only natural that it lives up to what you want and need. Before deciding on buying a property in Estonia, take a look at its floor plan. Check if the overall layout is what you're looking for. Then check the utilities if they're all working fine. Simply looking at the Energy Performance Certificate isn't enough. You need to see them for yourself. And of course, you also need to check the security of the place.

Buying Property in Estonia: Our Real Estate Guide

What Are The Costs of Buying Property?

As much as you might wish it to be, purchasing real estate in Estonia isn't that simple. It's not like buying something in a store and paying the cash register directly. There are more costs attached to this process than you might think. Sure, the biggest one is the final price of the property, but some of the other costs include stamp duty, notary fees, registration fees, your real estate agent's commission, and mortgage costs. Luckily, the final price of the property covers many of these. But there are some, such as the mortgage costs, that you have to pay on top of that.

How Do You Make an Offer to Buy Property in Estonia?

Speaking of the final price of the property, getting to that is an entire process of its own. As the buyer, you have the right to negotiate the price you will be paying for the real estate in Estonia. This starts with your offer. More often than not, the seller has already set an initial asking price for the property. When you make an offer, make sure it's not too far from what the seller is initially asking. Why? Because it's more than likely that they came up with that price as a result of a valuation, a kind of survey that determines the true value of the property. It's only fair that you offer up a price that's near the same number.

Buying Property in Estonia: Our Real Estate Guide

How Do You Get Mortgage in Estonia?

Even though your residency status doesn't pose that much of an issue regarding your right to purchase and own a property in Estonia, getting a mortgage is an entirely different story. Technically, foreigners and non-residents are allowed to apply for this loan as long as they've gotten permission from the local authorities to buy real estate in Estonia. However, the local institutions reserve the right to set their own rules regarding this matter. Many of them are stricter when it comes to this. So let's say you want to buy a place in Tallinn. your chances of getting a mortgage to help pay for it will likely improve if you relocate here.

How Do You Set Up the Sale & Purchase Contract?

Now, let's talk about setting up the sale & purchase contract. Or what they refer to in Estonia as the pre-purchase protocol. This is one of the most important documents in the process since it will legally bind both parties to the sale. At the time it's being drawn up by the notary, make sure to include terms and conditions that can help you in light of certain situations. This is very important because the moment you sign it, you'll be required to see the purchase through to the end. You'll also have to pay the seller a 10% deposit on top of that.

Buying Property in Estonia: Our Real Estate Guide

What Are The Different Types of Ownership Structures in Estonia?

Cee Legal Matters states that there many types of property ownership structures in Estonia. When you buy one for yourself here, you need to determine which structure you want your new real estate to fall under. Will you go for full ownership, wherein all the rights to the property are reserved exclusively for the listed owner? Or joint ownership, wherein the rights are equally divided among multiple listed owners on the title deed? There's also the right of superficies, an ownership structure that allows the 'superficiary' to acquire buildings, houses, and even plants on a property owned by someone else.

What Are The Legal Issues in Buying Properties in Estonia?

As you might've already expected, there are many legal issues that surround the purchase of real estate in Estonia. There's the issue of your residency status, as previously mentioned, that might hinder your right to own a place here. As are the property ownership structures that will determine the nature of your right in owning property in Estonia. And then there's the signing of the pre-purchase protocol, one of the most legally binding documents in the process. If you ever bow out of the agreement after signing it, you won't ever see the 10% deposit that you paid the seller ever again.

Buying Property in Estonia: Our Real Estate Guide

How Long is The Process of Buying Property in Estonia?

The length of time it will take for you to purchase a property in Estonia will depend on various factors. There's your getting the permission of the local authorities, for instance, if you're a non-resident. This might take some time depending on the office's current state. There's also the list of documents needed for the purchase, both on your end and on the seller. If you've prepared all of them beforehand, then it might only take around two to three months for you to purchase real estate in Estonia. If not and you start the process unprepared, then it can take you up to six months or possibly even more!

How Do You Search Properties For Sale in Estonia?

Now that you know many of the basics of buying real estate in Estonia, perhaps it's time to take the first step: finding a property to purchase. And for this, your best bet is to go online and visit some of the most popular property listing websites in the country. Though there are other ways to find available real estate in Estonia, going on these platforms is your easiest option. Especially if you're a foreigner and you're not even in Estonia in the first place. In this situation, websites like KV and City24 will surely help since they also cater to international buyers.

What are The Best Tips for Buying Property in Estonia?

Let's end this real estate guide with a few tips on how to buy a property in Estonia wisely. The first is that you need to get permission as early as possible. It's already been mentioned a couple of times in this guide that you never know how long it will take for you to get permission to purchase real estate in Estonia from the local authorities. The earlier you start this part of the process, the faster it will take to get everything else done. Secondly, set up a local bank account. Though it's not required, it will be easier for you as the process gets on. Especially when it's time to deal with all the costs.

Buying Property in Estonia: Our Real Estate Guide

You might not know it yet, but purchasing real estate in Estonia is a great investment. Learn the basics of buying properties in this highly underrated country. It might just be the next big opportunity that you were waiting for!

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