TRINITI
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
As a rule, foreigners (both natural persons and legal entities) are allowed to own immovable in Estonia. However, restrictions may apply in certain occasions (such as agricultural or forest land, as well as in case of larger estates). Additional restrictions exist for reasons of national security, particularly in areas such as islands, where natural persons who are not nationals of any EU member state or the United Kingdom, and legal persons not established in those countries, are prohibited from acquiring immovables. There are no restrictions on acquiring shares in Estonian companies, including those involved in the acquisition of immovable property.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
Under Estonian law, there are no statutory restrictions prohibiting or limiting the ability of companies registered abroad to obtain loans from banks, nor are there any specific limitations on borrowing for the purpose of acquiring real estate.
However, restrictions may arise from anti-money laundering legislation. For the purposes of anti-money laundering compliance, credit institutions apply internal regulations and due diligence measures, and many banks may, under their internal rules, refuse to issue loans to foreign-registered companies that have no substantial connection to Estonia.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
Statutory Registration Fees
Statutory state fees apply for entries made in the land register. The amounts depend on the nature of the deed as well as the value of the transaction. Reduced rates apply in specific cases. State fee must be paid prior to submitting the application to the registry.
Notary fees
All immovables’ transactions must be notarized. Notary fees apply, depending on the value of the transaction.
Value Added Tax (VAT)
Immovables’ transactions can be VAT-exempt or subject to VAT depending on circumstances. VAT rate is 24%.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
Owning immovable is subject to land tax. Land tax is imposed on all land, except in certain cases such as land under churches, land under public water bodies, land within nature conservation areas, and other exemptions provided by law.
Land tax is payable annually and is calculated based on the taxable value of the immovable.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
No, there are no tax breaks or other incentives for foreigners who buy (or own) real estate in Estonia.
How is the ownership of Real Estate evidenced in your jurisdiction?
By default, the primary document evidencing ownership is the land register entry, where the owner is shown. Entries in the land register are presumed to be correct. I.e., a mere allegation of inaccuracy in the entry is insufficient to challenge or amend it.
In case of a dispute over ownership, any type of evidence admissible under the Code of Civil Procedure may be used (including witness statements, party explanations, documentary evidence, photographs, etc.).
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
No. The entries in the Estonian Land Register (a register concerning ownership of immovable property) are public. Access to such entries, including the identity of the owner, is available to any person when searching for a registered immovable by address, registry number of the immovable, cadastral register number, name or registry code of a legal person.
As a result of a recent legislative amendments, it is no longer possible for random members of public to search if certain private individual owns immovable. However, certain persons (including Estonian Bar members) can still make such searches if necessary for performing their duties.