Investing in real estate in Riga

A good investment property is not just about a beautiful interior. It is important to assess rental demand, access to the city center, the quality of the building, the type of heating, and the real expenses of a future tenant.

Investing in Land?

Owned Land: Ideal. Separate ownership (land lease): The investor should know that this entails mandatory annual payments to the landowner (legal fee), which reduces net profit. A note should be made on the website: "We verify the land status for each investment property."

In Latvia, taxes can significantly "eat into" profitability if not calculated in advance. Rental income tax: Individuals can pay 10% (simplified regime without expense deduction, requires contract registration with SRS/VID). Or 25.5% (full regime, allowing deduction of repair, depreciation, and management expenses). Real estate tax (NĪN): Starting from 2026, differentiated rates apply in Riga. For properties where no one is declared (which is often the case with investment housing), the rate is higher—up to 1.5% of the cadastral value instead of the standard 0.2–0.6%. Capital gains tax: 20% upon sale of a property (difference between purchase and sale price).

Buy-to-Let: The most stable option. Focus on areas with developed IT infrastructure and universities.

Short-term / Airbnb: City center and Old Riga. A nuance: you need to check the rules of the specific homeowners' association (not all allow short-term rentals).

Renovation (Flip): Buying "distressed" apartments in pre-war buildings, renovating them, and reselling them. Requires knowledge of the Latvian construction materials market.