Limitations to Foreigners

1. Are there in your national system any limitations to foreigner citizens or foreign companies/companies controlled by foreign citizens regarding the acquisition of immovable properties? If yes:

1.1. Which legal regulations regulate in your country the prohibitions or limitations for foreigners’ acquisitions in case of transfer of property? Please specify the legal regulation and/or the range of the regulation that contains the prohibition.

Restrictions on Acquisition of Immovables Act: https://www.riigiteataja.ee/en/eli/527122023007/consolide

1.2. What do these limitations consist of?

Restrictions on Acquisition of Immovables Act provides the restrictions on the acquisition of immovables used as profit yielding land arising from public interest and the restrictions on the acquisition of immovables arising from national security reasons. For the purposes of this Act, public interest is, in particular, development of the management for specific purposes and sustainable management of immovables used as profit yielding land which contain agricultural and forest land.

1.3. Do these limitations apply to any foreign citizen, regardless their nationality, or only to non-EU Members national citizens?

All citizens of the European Economic Area are equal to Estonian citizens in terms of real estate transactions, restrictions are based on international agreements.
The limitations depend on the size of the agricultural and land forest, also if the land situates at the boarder of Estonia.

1.4. Do these limitations have?

• A defensive/protective purpose
• An economic purpose
• «Both economic and defensive/protective purposes»
• Other purposes (please specify)

2. To which kind of land registry unit do these limitations apply? (Example: only land plots, only rural areas, only foreign borders, dwellings and homes, other buildings?

In Estonia, the most important restrictions on the acquisition of real estate are only for plots of agricultural and forest land larger than 10 hectares and on small islands and in the territory of local governments along the eastern border. Acquisition of apartment properties is not restricted at all.

If you want to buy more than 10 ha of agricultural and forest land, the buyer who is a legal person, including an Estonian citizen or a foreign company, must have been engaged in agriculture or forest management, including the production of agricultural products, for more than 3 years. Proof of this can be obtained from the Tax and Customs Board. A private person has the right to buy as much land as he wants, there are no restrictions.

If a citizen from outside the European contracting states wants to buy forest and agricultural land, then it is necessary to apply for the permission of the local government, regardless of the size of the property. A person must have lived permanently in Estonia for at least 6 months, then they can be given a purchase permit. Without it, the notary cannot prove the transaction. It is also not forbidden to establish a company in Estonia and acquire almost any real estate through it.

However, on small islands or in municipalities bordering the Russian Federation citizens of third countries cannot buy land under any conditions. Such so-called national defense restrictions apply to all types of land.

3. To which kind of transfers or burdens do these limitations apply? (Example: to every transfer, non-free transfers, differently in case of inheritance than in case of purchase, mortgages in favor of foreigners….)

Generally to every transfer except in the cases of acquisition of immovables:

• if a co-owner acquires a legal share in the immovable from another co-owner;
• to the joint property of spouses or registered partners if the restrictions provided by this Act do not apply to at least one of the spouses or registered partners;
• by the transferor’s spouse, registered partner, descendant or ascendant;
• by succession;
• if the immovable is acquired by merger or division of legal persons.

4. Apart from the previous limitation to acquisition of property by foreigners, are there any other measures at your country relevant for this topic? (Example: pre-emption rights in case of purchase un favor of a foreigner, social or residential measures bases on nationality and non in residential permits….)

No

5. To what extent the land registrars’ controls in a deed of transfer the prohibitions imposed to foreigners to acquire land and buildings in your country?

5.1. Do you only check if the transfer administrative authorization requirement is met, or do you also confirm that the authorization is valid? For example, do you consider property type, like rural or forestry classification, which might limit foreign transfers? Or do you verify the percentage of foreign land ownership in a specific area, especially if there are restrictions on the number of buyers or land size?

The registrar controls the citizenship of the buyer and the property type and size. The limitations depend of the size of the agricultural and land forest, also if the land situates at the boarder of Estonia.

5.2. What would happen if an authorization were needed, and it does not come with the title submitted for registration?

First if the deed needs a permission of municipality and it is not submitted with the deed the registrar asks the permission of municipality. Any transaction which is in violation of the restrictions on the acquisition of immovables is void and registrar refuses the transaction of the property.

5.3. What would happen in case a deed of inheritance in favor of a foreigner transfers property over land or buildings subject to limitations for foreigners’ acquisitions in your country?

These limitations do not apply in the cases of acquisition of immovables by succession.

5.4. If the states have preemption right in case of transfer, would you reject the registration if no notification to the state to enhanced it right is done?

The state does not have the preemption right in case of transfer.

6. Do you expect any legal modifications on this issue?

The Ministry of Interior is dealing at the moment with the rules and legislation and plans to restrict the rules for acquiring property for foreigners.