In Latvia alone, 20% of real estate transactions take place through licensed agents and companies!

About 50,000 real estate transactions take place in Latvia per year, and only 20% of them take place through licensed agents and companies, said Aigars Šmits, chairman of the board of LANIDA, at a discussion organized by the Latvian Real Estate Transaction Association (LANĪDA) on Friday. The head of LANĪDA emphasized that on August 1, 2020, the Law on the Operation of Real Estate Transaction Intermediaries came into force, but on June 7, 2023, amendments to the Law on the Operation of Real Estate Transaction Intermediaries entered into force, which strengthened the requirements for the operation of real estate transaction intermediaries in Latvia, ensuring a more efficient supervision of the professional activity of these persons. Šmits emphasized that, in LANĪD’s view, this law does not work and the real estate transaction sector is still quite “grey”. Referring to “Cenu banka” data, Šmits pointed out that from year to year approximately 33-34% of real estate transactions take place for unbelievable amounts, that is, for those that do not correspond to the real market situation. As an example, Schmitt cited agricultural land transactions, where everyone working in the industry knows that the real price is 10,000 to 12,000 euros per hectare, but statistics show a price of 5,000 euros per hectare. Šmits explained that, according to LANĪD’s estimates, up to 100 million euros are hidden in this “gray” zone, which the state does not get in the form of paid taxes or fees. Kristīne Dubane, a LANĪDA certified real estate transaction manager, admitted that real estate purchase transactions for cash still take place, even though such transactions are prohibited. According to her, one of the reasons for such transactions is the requirement to pay 20% capital gains tax.

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