We present to your attention an article in which our company's lawyer at KOM-INVEST explains what nuances should be considered when purchasing real estate where the seller is a citizen of Russia or Belarus.
Following amendments to the Immigration Law on September 24, 2022, citizens of the Russian Federation and Belarus have limited opportunities to extend their residence permit.
Many cannot access their property in Latvia. Some properties sit vacant, others are rented out, but many foreigners have decided to sell their property.
These transactions are quite complicated to process.
"Delfi Business" found out what a potential buyer should expect if such a transaction needs to be concluded.
Is such real estate cheaper? No, these transactions do not affect the general market, because properties are sold at market prices (not at dumping prices), and transactions are quite complex, as they require permits from sellers, money is transferred to third countries (not Europe) - Kazakhstan, Tajikistan. Banks are also reluctant to issue loans for the purchase of such properties.
Since Russia and Belarus are neighbors of Latvia, there is considerable property here that directly or indirectly, for example through offshore companies, belongs to citizens of these countries. And in the current situation, Russians and Belarusians may be especially motivated to sell their property.
Latvia is bound by both EU sanctions and sanctions from the U.S. Office of Foreign Assets Control, which all Latvian financial institutions must comply with. Consequently, many citizens of Russia and Belarus directly fall under such sanctions, which provide for "freezing" of their financial assets and property. That is, buying or selling this real estate is prohibited.
Furthermore, the EU has imposed sanctions on all citizens of Russia and Belarus who do not have a residence permit in an EU member state or in Switzerland, Iceland, Norway, or Liechtenstein. Specifically, these non-residents are not allowed to hold more than 100,000 euros or the equivalent in banks, which may also affect a real estate purchase transaction.
Each case is evaluated individually by the bank; it is important for it not to violate sanctions from either the bank's side or the buyer's side. Thus, a buyer wishing to purchase real estate from a non-resident should be informed about the seller. They should also verify that there are no direct or indirect sanctions against the seller and the bank used by the seller that would prevent the transaction from taking place.
It is worth consulting not only with bank specialists, but also with lawyers and qualified real estate experts.
If you are interested in processing such a transaction (whether sale or purchase), contact KOM-INVEST, we will consult with you and help you complete the transaction!
Have questions? We await your letter or call!
Phone number: +371 29774775 (Viber, WhatsApp)
Email: info@kominvest.com