Estonia: A Buyer’s Guide

Estonia is not usually at the top of property investors’ lists when they are looking to buy new property. Partly, this has been because foreign ownership of real estate has been tightly controlled and regulated along with the fact that Estonia has been occupied or controlled by other nations for much of it’s recent history.

However over the past decade or so, Estonia has gained it’s independence, the government has started to liberalize laws regarding foreign property ownership, and the Estonian Tourist Board is working hard to promote the country around the world. All this means that Estonia is starting to become one of the most hotly tipped places in Eastern Europe to buy.

Buying a Property in Estonia
The process of buying real estate and property in Estonia may look daunting at first glance but the Estonia government has been working hard to make life easier for foreign nationals attempting to buy property in the country.

There are two main contracts that are required in Estonia property sales and both documents should be prepared by an authorised notary. In Estonia, it is compulsory that a notary is involved in real estate sales. If you would prefer not to have a notary prepare the contracts, it is possible for someone else to draft them however a notary is required to review them in detail to ensure that everything meets the requirements of Estonian law and that they accurately reflect the property transaction.

The first agreement that will be prepared is the sales-purchase agreement. This will be drawn up once the buyer has made an offer on the property for sale and the vendor accepts the price. Usually, it takes between two to four weeks for the sales-purchase agreement to be drawn up.

Once the seller has accepted an offer on the property, the buyer is usually expected to find financing for their property deal. The buyer must also now pay a state fee to the Estonian government – this is 0.4 percent of the value of the real estate they are buying. Mortgages can be obtained by foreign investors in Estonia for both residential and investment properties. The rates will typically start from around 4.5 percent, although this will vary accordingly. Generally speaking, the maximum mortgage loan you will be able to get is 80 percent of the property value. The standard mortgage term is around 30 years.

The final agreement will now be drawn up for the property. This is basically a transfer of ownership document. Once both parties have signed the document, an application will be made to the Land Register Office to transfer the ownership of the property from the vendor to the buyer. A public notice of the change will then be published in the Official State Gazette.

Click here to find our free guides on the best places to buy in Estonia.

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