Holiday Home Insurance Estonia
Insurance for your Holiday Home, Second Home or Investment property in Estonia is now available from the United Kingdom. You can of course expect to receive a wide range of perils, Fire, Lightning, Explosion, Earthquake, Storm, Flood etc. If you have a mortgage on your property then securing adequate protection will almost certainly be a condition of the loan, if you have no mortgage, then insurance will provide you with valuable protection against a wide range of perils. In particular, a study commissioned by the Ministry of the Environment has noted 15 regions in the country that are at significant risk of flooding. Whilst measures to reduce the chances of damage in these regions caused by flooding is underway, it would be unwise to leave your property uninsured against this risk.As well as providing insurance against flood damage, a policy can normally be extended to include the correct form of liability insurance cover, this is essential if you are planning to let your property. The Republic of Estonia is in Eastern Europe and is bordered by the Gulf of Finland and Gulf of Livonia, Latvia & Russia. Until the country joined the EU, in 2004, it was not considered a country for property investment, but that has changed dramatically. There are over fifteen hundred islands that belong to Estonia but the bulk of the property activity is centred on Tallinn, the capital city and Estonia’s main port. Other cities include Tartu, Narva, Parnu, Haapsalu, Viljandi, Johvi, Rakvere, Sillamae, Kuressaare, Voru, Paide and Valga but these are not nearly as popular with foreign buyers.
Why Buy a Holiday Home in Estonia? – A recent survey has placed Tallin, the capital of Estonia, near the top of countries that are likely to produce strong property returns in the coming years. Estonia is one of the most dynamic and investor-friendly of the 10 countries that joined the European Union in May 2004, with the economy averaging annual growth of 6% in recent years. Since joining the EU the Estonian economy has gone from strength to strength and it is widely accepted that this will continue for the foreseeable future. The figures are very impressive, in 2006, rural property prices increased by 54%,this. followed average house price rises of 57% in 2005, and 25% in 2004. Underpinning these increases, Estonia offers a fully computerised land registry, strong business culture, low levels of corruption and taxation and an increasingly wealthy middle class that are keen to move in to quality accommodation. Whilst they are embracing the culture of buying their own property, many still prefer to renters for the present moment.
The Holiday Home Market in Estonia – Without doubt the main area of growth has been in Tallin, the capital city and short term rental opportunities are good with the city becoming a firm favourite with visitors from the United Kingdom. Out side of the capital, property is often available at giveaway prices, and many of these regions remain undiscovered, areas include Harju, Laane,Parnu,Rapla,Tartu and Viljandi. Two systems of property rental occur in Estonia and most rental to non residents happen on an open market basis. There is a rent controlled system but this tends to produce lower rental yields and is mainly used by Estonian citizens.
How to Buy a Holiday Home in Estonia – Estonia, is not known for problems with property purchase and many investors from overseas are purchasing property in the country., However as with any country where you are a non resident or unfamiliar, you cannot put too high a price on good quality legal advice, Your solicitor should be able to negotiate matters on your behalf and if possible, only deal with a vendor that is represented via an estate agent. Estonian estate agents are on the whole fairly professional and deals can often be concluded quite quickly. The whole purchase procedure depends to a great degree on how quickly the local notary can arrangement an appointment to sign the paperwork. You may find you can conclude the whole deal in a little under two months. The notary will oversee the property transfer and make sure that the agreement meets all the requirements of Estonian law. You should not expect too many problems in this area as the Estonia land registry system is very stable. Many estate agents do not insist on a notary signing the documents ( purely because of the additional costs involved) but this practice should be avoided if at all possible. Without the documents being signed formally in front of a notary, their legality may be called in to question at a later date.
When you have located the property you want to purchase, your chosen solicitor will to able to guide you through the sales process, at this point and before you go any further it is a good idea to check out any special rules and regulations that relate to short term holiday home rental. If you are intending to buy an apartment in a block., make sure that the terms of the lease allow for short term renting. Prices are generally negotiable buy not by a big margin, sellers are usually reluctant to drop much below the asking price. When your solicitor is satisfied with matters, it is usual to enter in to a ‘pre purchase protocol’. This contract commits both parties to the sale. You must be happy with all matters at this stage as this contract is immediately binding under Estonian law and there is no opt out period, you are legally obliged to buy the property. This ‘firm sale’ places certain obligations on you and thus you must to confident that you will be able obtain the necessary finance for purchase of the property, thus it is a good idea to have your finances sorted out before you get to this stage of the process. One other peculiarity of the Estonian system is that their are no title deeds to property, ownership is noted in a land registry book and will only happen after the appropriate fee is paid.