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Housing in Estonia

Popular area for the expatriate community is Tallinn. Housing in the old town is very popular with the expatriate community. However, the houses in the suburbs are also very popular.

Cost of housing in Estonia varies from area to area and the size of the house or apartment; you'll pay anything from €1,500 for an apartment and €2,000 for a home and higher. The local currency is Kroon (EKR).

Buying a Property

Foreign individuals and companies are allowed to acquire real estate with the permission of the local authorities. There are legal restrictions on acquiring agricultural and woodland of 10 hectares or more, and permission from the county governor is needed.

Foreign individuals are not allowed to acquire land located in smaller islands, or listed territories adjacent to the Russian border.

The procedure for buying property is relatively simple; however, a reputable real estate agent and an experienced property lawyer should be consulted.

The buying process begins with the selection of a particular property. If the buyer decides to proceed with the sale, a reservation agreement is usually drawn up between the buyer and the developer, which amounts to a preliminary contract, formally documenting the intended purchase and explaining the deposit amount and the final price payable on completion.

Compensation clauses should be included in the reservation agreement and the deposit amount, which is usually between 20% and 30% of the final purchase price, is payable once the agreement is signed. The reservation agreement, furthermore, does not need to be notarised and can be signed without any need for the buyer to visit Estonia.

When the property is complete or available, the buyer has a certain time period in which to inspect the property and notify the developer or seller of any outstanding problems.

If all standards are met, the final balance of the purchase price is transferable, payable to the notary, in time for the agreed completion or closing date. However, the buyer must attend the notary on the completion date to sign the purchase contact, and this contract is normally in Estonian. Translations can be arranged for a small fee.

After the completion of the purchase, the buyer must pay a stamp duty charge to the local authority before the purchase agreement is released to them. There are ongoing maintenance charges to be considered, but in the case of apartments, these are levied via the property management company responsible for the maintenance of the overall apartment block.

Renting a Property

Foreigners in Estonia generally rent through the free market as opposed to the rent-controlled. Rent-controlled units are typically not available to foreigners because they are usually occupied long-term by Estonian citizens, and some account of income is taken in the initial negotiations for leases, which generally excludes foreigners. Although free-market rentals are more expensive, the difference is not, at the moment, very substantial.

It is advisable to find a reputable real estate agency that is familiar with the rental market area that is of interest. Although agencies ask for either a fixed sum or a portion of a month's rent for their mediating services, their assistance, when dealing with landlords and lease contracts is invaluable.

Before signing a lease or rental agreement it is important that every detail of the lease should be clearly specified in writing. Rent is generally paid monthly, and often via automated bank withdrawals. It is common in Estonia for landlords to request advance payments for up to six months rent, sometimes in addition to a security deposit. Some leases are inclusive of some or all utilities.

Foreigners should be aware the property value in Estonia is expected by some to soar over the next ten to fifteen years. Whilst renting may be a financially prudent solution for short- to medium-term residency in Estonia, it may be wise to at least consider the possibility of buying property at this time.




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