Amendments to the Latvian immigration law that took effect in September state that temporary residence permits (TRP) can be obtained when purchasing real estate at a value of at least EUR 250,000, and the amendments also include rules that were proposed by the governing coalition of the previous Saeima, but that is not the main reason why transactions in this segment have all but ground to a halt. Baltic Sotheby’s International Realty co-owner Vestards Rozenbergs: “Generally speaking, legislative regulations in Latvia in relation to the purchase of real estate by foreigners so as to receive a TRP are among the best in Europe from the perspective of how this process is organised and what the procedures and administrative processes are. At the same time, however, the unstable situation in our neighbouring region has also affected decisions in our country. The Saeima has currently given first-reading approval to a proposal to halt the issuance of TRPs to citizens of Russia who purchase real estate. The proposal was urgently moved forward right before the election, even though the ability to receive a TRP via subordinated bank loans or investments in corporate equity capital is not being evaluated in the same context. This information has very quickly been spotted by the media in our neighbouring country, and the information is being presented in accordance with Russia’s official views – Latvia has shut down the programme, and it is not risky to invest in real estate. This tendentious information creates uncertainties and rumours that satisfy the goal of limiting the flow of capital out of Russia and its investment in the European Union.”
Data from the Latvian Land Book show the average number of monthly transactions during the first eight months of 2013 in this regard was 25. During the same period in 2004 (January-August), there was an average of 30 transactions per month in the segment above EUR 200,000. If we compare data from September and October this year to data from the same period in 2013, however, we see that the number of transactions has shrunk by more than one-half – an average of 40 deals in September and October 2013, but only 17 transactions on average in September and October 2014. It is expected that this trend might continue.