When purchasing from individuals, you cannot always rely on the information of public registers that it is his/her separate property. Depending on the legal framework, the tax implications may also vary. The Baltic angle.
Contents: legal regulation (when property is joint property of spouses and when it is separate property) in Estonia, Lithuania, and Latvia. Taxes. Conclusions.
In Estonia
If registered in the land register – only one of the spouses
In our northern neighbours, property acquired during cohabitation belongs to both spouses or partners by default. However, this is not always reflected in the relevant registers, where often only one of the spouses is listed as the owner. This could cause certain practical problems.
For example
..if someone wants to purchase real estate registered to one of the spouses, they should check not only the land register, but also the publicly available register of spouses in Estonia to make sure that the spouses have not chosen a different regime, such as separation of property.
In a 2017 case…
…the Estonian Supreme Court ruled that even the notary had made a mistake by not checking that the property belonged to both spouses. In addition, the court also found that the entry in the real estate register stating that the property belonged to only one of the spouses was incorrect. Thus, in essence, the court placed the family’s property relations above the property rights reflected in the land register.
Read the full story by tax expert Jānis Taukačs here.
