Latvian residence permit programme is still active

Latvian residence permit programme is still active
Roman Golubev

Regardless of borders being closed due to a certain coronavirus pandemic this spring, the Latvian programme of granting residence permits to foreigners purchasing real estate is still active. In the first half of 2020, investors purchased 20 properties that qualify for a residence permit under the Immigration Law. 32 members of their families have also received a first time 5-year Latvian residence permit along with them.  All news, Real estate news, R.Evolution, City24The golden age of Latvian residence permit programme, granting residence permits to foreigners in exchange for investment into real estate, was between years 2012 and 2014. As a result of it, non-residents willing to obtain a Latvian ID card became the owners of 2225 real estate properties in Riga, Jurmala and other regions of the country. Thereafter, the demand subsided. It was not due to natural market dynamics, but as a result of a change in the rules of the game. Starting from September 1, 2014, Latvia has raised the minimum value of real estate required to qualify for a residence permit to 250,000 euros. A bit later, this was supplemented by a requirement to pay a state fee when applying for the first residence permit, as well as when renewing it for an additional 5-year period. Even though in these new conditions the Latvian immigration product was no longer super-cheap, fashionable and had lost its mass appeal in the eyes of foreign clients, it still remained amongst the most affordable and financially attractive in the European Union, along with the Greek offer.

Today, a Latvian residence permit is an option that foreign buyers of real estate pursue after extensive research, understanding all the conditions and requirements imposed on them, as well as the purpose they need it for. According to statistics from the Office of Citizenship and Migration Affairs of Latvia, in year 2019 a total of 84 investors bought Latvian real estate in order to obtain the so-called golden visa. Along with them, the coveted document issued under the relevant article in the law "On Immigration" was issued to their 215 relatives - spouses and underage children. In terms of the geography of recipients of residence permits, the new holders of a residence permit through real estate purchase were predominantly Russian citizens - 58 and 135, respectively.

At least the same level of demand for the Latvian investment offer was anticipated in 2020 as well. However, the global coronavirus pandemic made its own adjustments, just as for most things this year, it also disrupted the plans of buyers. The Office of Citizenship and Migration Affairs of Latvia has reported issuing new residence permits in the first half of 2020 to 20 foreign buyers of real estate in Latvia and, additionally, to their 32 family members. Generally, even though these people represent eight different countries, 30 out of 52 people were Russian citizens.

If we take a closer look at the statistics of the first half of 2020, it becomes clear that these statistics actually reflect the result of the first two and a half months, not half a year. Starting from March 13, an emergency regime was introduced in Latvia. Note that the borders and Latvian embassies abroad were closed as a result, any international passenger traffic was stopped. And it has not been resumed to Russia, Ukraine, and Belarus in the first half of autumn. All this, of course, has created and continues to create serious difficulties for potential non-resident purchasers of real estate who have set their sights on a Latvian residence permit. And there is no doubt that there are such people, within the same hundreds of investors per year. From March, based on calls and inquires from abroad to the players of the Latvian real estate market, there is an accumulation of deferred demand for this product, the true size of which Latvia will feel when it opens its borders to the east and our local state institutions will begin to function in a full-fledged, instead of remote working regime. And the first positive signals are already there.

According to the m2 magazine and the varianti.lv website, in September, the Latvian Embassy in Moscow began accommodating Russians who need registration and extension of Latvian residence permits. Available times are booked a couple of weeks ahead. So if non-residents have authorized persons in Latvia and the ability to remotely conduct a purchase transaction, then they (at least the Russians) can acquire real estate and, after receiving the Land Register (certificate of ownership), they can apply for a first time residence permit in the Latvian embassy. The legislation permits it.

We would like to point out that the amendments to the law "On Immigration", allowing foreigners to apply for a Latvian residence permit when buying real estate, celebrated their tenth anniversary on July 1, 2020. Termination of this program is not on the agenda of politicians.

As of January 1, 2020, a total of 7181 people had a valid residence permit in Latvia on the basis of purchase and ownership of real estate, 3345 of them were investors themselves. They represented 40 countries of the world.

These are the main provisions of the Law "On Immigration", allowing foreigners to apply for a 5-year Latvian residence permit by purchasing a real estate:

* in Riga, Jurmala, as well as in Adazi, Babite, Baldone, Carnikava, Garkalne, Ikskile, Kekava, Marupe, Olaine, Ropazi, Salaspils, Saulkrasti and Stopini regions, this must be one functionally unseparated real estate (with the exception of non-built-up land) with a purchase price of no less than EUR 250,000. Outside of the above territories, it can be two objects for a total price of no less than EUR 250,000;

the payment of purchase price must be done via non-cash transfer;

the property may not have any real estate tax debt;

* cadastral value of the purchased property exceeds EUR 80,000 (if two objects outside of the above regions - 40,000 + 40,000). If the cadastral value is lower, then there must be an assessment by a certified specialist that the market value of real estate is at least 250,000 euros (outside of the above regions - 125,000 + 125,000);

there is no agricultural land or forests on the real estate;

when applying for the first residence permit, a fee of 5% of the purchase price of the real estate is paid to the state budget.

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