The obtaining of temporary residence permits by foreign citizens who take part in the real estate purchase programme is a convenient and advantageous way to invest free resources and also to make it easier to travel in the Schengen Zone. It is clear that until now, Latvia has offered the most advantageous terms for such transactions, and statistics show that during the four years that the programme has been in place, more than 10,000 applications for residence permits have been received by foreigners who purchase real estate in Latvia and from their family members.
Transaction sum raised to EUR 250,000
Amendments to the law on temporary residence permits took effect on September 1, 2014, and the most important change is that the sum of the necessary transaction has been raised to EUR 250,000. The cadastral value of the property must be at least EUR 80,000, and if the value is below that, a real estate appraisal is necessary to confirm that the sum of the transaction is in accordance with the market value of the property. These rules apply not just to the Rīga planning region and to the country’s largest cities, but to the whole territory of Latvia. The real estate may not include farmland or forestland, and it must include a structure. Here it must be noted that the concept of a structure will include foundations or buildings that have not yet been fully finished. In any event, however, the structure must be registered in the Land Book. Also as of September 1, the investor must contribute 5% of the sum of the transaction to the Latvian Economic Development Fund.
Rules in Latvia now closer to those in other EU member states
Investors and potential applicants for temporary residence permits in Latvia have had fairly substantial advantages in the past – among the lowest minimal prices (EUR 142,300 in Rīga, the surrounding region and other larger cities, but only EUR 71,100 elsewhere). No major additional investments had to be made, and there was no minimal term of residency in the country. There were also no limitations against the place, size and condition of the property, and the property could be leased out. While in other European countries, where the required investment is closer to the Latvian sum, real estate buyers who take part in the permit programme face a series of additional requirements or limitations. In Greece, for instance, such people are not allowed to join the labour market, in Cyprus people are allowed to purchase no more than two buildings, in Malta the property may not be leased out, and in Spain the purchase cannot be financed by commercial banks. In Spain and Portugal, the minimal investment to receive a temporary residence permit is EUR 500,000. The amendments to Latvia’s immigration law have brought the terms and conditions of such transactions closer to similar laws in this area elsewhere in the European Union.
For more information
What is TRP?
The TRP is issued for five years when the recipient has invested in real estate. The permit can be extended for a new period if the real estate continues to be owned by the relevant investor.
A TRP allows its recipient to travel freely in the countries of the Schengen Zone, to live in Latvia, and to work in Latvia and Schengen Zone countries up to 90 days in six months. Latvia, however, does not set a minimum term in terms of how long the recipient can live in Latvia. The investor does, however, need to register once a year to maintain the validity of the TRP.
The TRP does not necessarily mean that the investor becomes a tax resident in Latvia. This status can be granted if the investor spends more than 183 days a year in the country.
Personalised TRP cards are issued for one year, 45 to 90 days before the expiration of the term of the card, the investor and his or her family members must undergo an annual registration procedure to receive a new card for the next year.
The TRP can receive also the spouse of the investor and the the minor dependents of the owner.
From September 1, 2014 in receiving a TRP will be following changes
| Now | From September 1, 2014 | |
| A minimum sum of the real estate property deal in Rīga, the Rīga District, other larger cities in Latvia | 142 300 EUR | 250 000 EUR |
| The cadastral value of the real estate property on the date of purchase | 42 690 EUR | 80 000 EUR (remains in place the opportunity to ensure the appraisal of the market value of properties with a lower cadastral value) |
| The minimum sum of the real estate property deal in the regions of Latvia | 71 150 EUR | 250 000EUR |
| The cadastral value of the real estate property on the date of purchase | 14 230 EUR | 80 000 EUR |
| Number of the real estate properties | The total amount of the deal could be calculated for several real estate properties together | The investor can only buy one real estate property (or few functionally related) |
| The additional requirements | The contribution of 5% of the sum of the deal to the Latvian Economic Development Fund |