Changes to the legislation, which will come into force in 2027, stipulate that Russian and Belarusian citizens without a permanent residence permit will not be able to purchase real estate in Estonia, writes ERR News.
The Estonian Ministry of the Interior announced plans to tighten the legislation related to the purchase of real estate in January, and a draft law is currently being prepared. The explanatory memorandum states that the aim of the law is to limit the ability of hostile states or persons under their control to purchase real estate in order to then carry out intelligence and influence operations in Estonia, or to carry out sabotage. Thus, the changes to the law will strengthen national security.
The new rules will for the first time allow persons from countries that pose a threat to Estonia’s security and public order to be prohibited from purchasing real estate. This means that it will also be possible to prohibit citizens of Russia and Belarus without a permanent residence permit, companies and legal entities that are the beneficial owners, from acquiring real estate.
The changes will not be applied retroactively and will not affect persons with permanent residence permits.
The amendments to the law will harmonize the restrictions so that they also apply to apartments.
Until now, the Law on Restrictions on the Acquisition of Real Estate did not mention apartment properties. The possibility of circumventing the restrictions by acquiring property through companies registered in Estonia or the European Economic Area countries has also been eliminated, as the beneficial owners will be assessed, which will require notarial confirmation and other evidence of the citizenship of these persons.
The ban on acquiring real estate will also apply to legal entities if the beneficial owner is a natural person who is not a citizen of the European Economic Area or the United Kingdom.
The Ministry of the Interior has stated in an explanatory memorandum that the amendments are in line with the Estonian constitution, and the restrictions are moderate and lawful, but serve a very important purpose – the protection of Estonia’s national security.
The promoters of the bill said that the amendments are also in line with European Union legislation,
which, based on the needs of public order and security, allows for restrictions on the movement of capital. The memorandum notes that persons with Russian or Belarusian citizenship will still be able to rent or lease property, and in certain cases the Estonian government may decide on exceptions.
The restrictions could affect approximately 600 transactions per year, thus not having a significant impact on the real estate market. The draft law was developed taking into account the experience of Finland, Latvia and Lithuania – these countries have also introduced changes to their legislation on the acquisition of real estate for security reasons. The law is expected to enter into force on the 1st of January, 2027.
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