How to Buy a Home in Estonia as a Foreigner

Over the past five years, the share of foreign clients in the Estonian real estate market has remained stable at around 7%. Bonava Estonia's sales and marketing director Lauri Laanoja has noted that this percentage has even grown among those interested in new developments. "The share of foreigners among our clients has consistently increased. If foreigners made up 7% of buyers in 2022, then in 2023 that rate was already 9%. This year, already 12% of our clients come from some foreign country," comments Lauri Laanoja.

Regardless of whether you are an investor or a foreign citizen who has moved to Estonia to live – buying real estate is an important process that requires taking many aspects into account. In Estonia, there are no major restrictions on property acquisition for non-citizens, and the process and conditions for buying an apartment are similar for citizens and foreigners. Lauri Laanoja outlines the main steps that typically need to be followed when buying real estate in Estonia.

Explore financing options

Before starting to search for suitable real estate, it is important to understand your financial possibilities. "It's worth consulting with several banks to get a better understanding of loan terms, as different banks can offer different options," recommends Laanoja. For a foreigner to qualify for a housing loan, it is generally necessary to have a residence permit and to prove stable income. Additionally, you should be prepared to pay a down payment on the home, which is typically 10-20% of the property value.

Finding a new home

Once you have a picture of your financial possibilities, it's time to start searching for a suitable home. Most Estonian real estate listings are available on major real estate portals such as kinnisvara24.ee, kv.ee and city24.ee. "However, if you are interested in a specific area or a new development, it's worth checking the developers' websites as well, because they often have a larger selection and offer special deals," advises Bonava's sales director.

When choosing an apartment, it is important to visit the property in person to assess the quality of construction or how well the building has been maintained and looked after over time. "If you are interested in a new development, most developers have show apartments where you can get a good sense of the home's features. It's certainly worth finding out what the utility costs are in the building and checking the building's energy label," explains Laanoja. The information gathered will help you assess whether the monthly costs, including loan payments, are actually affordable.

Once a suitable apartment has been selected, you should request a specific loan offer from your bank. The application can be conveniently completed on the bank's website.

Completing the purchase

After selecting the apartment and receiving loan confirmation, the next step is to arrange the necessary notarial procedures. "A real estate agent or sales consultant can help with this. If buying real estate directly from the owner, it should be agreed who will arrange the notary meeting and send the exact transaction details and contact information of the parties to the notary. A representative of the bank financing the purchase must also be present during the transaction," describes Laanoja.

In Estonia, real estate purchases are confirmed in notarial form; the sales contract contains details such as a description of the property, price, payment terms, and the rights and obligations of the parties. The contract becomes legally binding after it is signed. Although according to law a third party with sufficient language skills can translate the contract on the spot, it is advisable to use the services of a sworn translator to fully understand the contract.

"After signing the contract, the notary sends the certified documents to the Land Registry, where the appropriate entries are made in the register and the purchased property is officially confirmed as your property. Congratulations – you are now a homeowner in Estonia!" concludes Laanoja.

Buying real estate in Estonia is quite a straightforward process. Local real estate agents or residential developers' sales consultants are always ready to help and advise on the specifics of the Estonian real estate market.

If you have recently arrived in Estonia, it is useful to familiarize yourself with a guide that will help you settle in our country. You can read it on the Work in Estonia website https://workinestonia.com/wp-content/uploads/2024/07/relocation-guide.pdf