According to Helena-Laura Lesment, a real estate agent and consultant at 1Partner Kinnisvara, many apartments sold as residential are actually officially registered as non-residential premises, i.e. as guest apartments. At first glance, their slightly more favourable price may seem attractive, but later on such a purchase may lead to additional expenses and make it more difficult to sell the apartment in the future. “Yes, buying a guest apartment may seem financially advantageous at first glance, but you should be careful and carefully calculate all the risks associated with this purchase,” said Lesment, adding that such a deal should only be considered if the difference in price compared to similar residential premises is really significant. Helena-Laura Lesment also said that when buying an apartment registered as commercial premises, it should be borne in mind that it is often more difficult to obtain a housing loan for the purchase of such an apartment and, as a rule, the interest rate on the loan is higher than usual. “An apartment registered as a guest apartment must be at least 10% cheaper than similar apartments registered as residential premises, and even then the buyer must make precise calculations, since this lower price will entail additional expenses in the future,” Lesment explained. The 1Partner consultant emphasized that even if the bank is willing to provide a loan, the owner may have problems in the future when deciding to sell the apartment, since the next buyer may not receive such financing. In addition, the buyer of an apartment registered as non-residential cannot receive a KredEx surety for a housing loan, which allows young families, young professionals and large families to reduce the amount of the down payment. In addition, the exemption from land tax on the land under the house does not apply to owners of commercial real estate, which, in turn, further increases the current costs associated with owning real estate. And another important circumstance that Lesment points out: although in practice this happens extremely rarely, in fact, the local government has the right to impose a fine for the permanent use of a guest apartment for personal purposes as a residential premises.
