Finland and Latvia tighten real estate rules to discourage Russian buyers

Russia’s military aggression against Ukraine and the risk of new Kremlin-driven provocations across Europe have radically reshaped how EU countries approach national security and defence. One consequence of this shift has been a new focus on property ownership by Russian citizens near strategic sites.

Several EU states have discovered cases where Russians purchased land adjacent to military bases, power stations or border zones, often to build “holiday villages” that could serve non-civilian purposes. These properties, officials warn, might be used for espionage, sabotage or as logistical support points in the event of potential ground incursions.

In response, some EU countries have moved to legislate preventive measures limiting or filtering the acquisition of real estate by nationals of aggressor states. Among the most proactive examples are frontline countries Finland and Latvia, which adopted distinct but complementary legal frameworks in the summer of 2025.

Finland: protecting critical infrastructure

Since joining NATO, Finland has treated hybrid threats from Russia as a core national security challenge. Russian citizens have long been able to buy property freely across the country, but the Ministry of Defence has identified more than 3,500 properties linked to Russian owners over the past five years – some with suspicious features such as large helipads or reinforced buildings near key infrastructure.

Others involved investments in abandoned hotels or warehouses close to border checkpoints. These patterns raised concerns about potential non-commercial motives behind such acquisitions.

To address the risk, Finland amended its property laws in July 2025 to introduce a “hard filter” system for foreign ownership. Under the new rules, citizens and entities from countries that threaten national security or violate another nation’s territorial integrity automatically face barriers to obtaining property rights.

The Finnish Defence Ministry now oversees all real estate purchase applications involving foreign citizens, with access to intelligence from migration, police and tax authorities. Exceptions exist for individuals with permanent residence in Finland or valid EU long-term residence permits issued by Finnish authorities, ensuring legal certainty for those already integrated into Finnish society.

Latvia: extending restrictions to companies

Latvia’s approach, though different in scope, serves the same purpose. Until recently, Riga’s oversight of property transactions near defence or infrastructure sites was weak, and the government lacked accurate data on how many properties were owned by Russians or Belarusians.

By early 2025, authorities had identified over 1,800 Russian and 120 Belarusian citizens as beneficial owners of companies holding Latvian real estate. The government responded with a series of legislative changes culminating in the Law on Restrictions on Transactions Threatening National Security, adopted in summer 2025.

The law bans property acquisitions by capital linked to aggressor states and restricts the use of such assets in ways that could undermine Latvia’s interests. The prohibition extends beyond individuals to legal entities registered in those countries or controlled by their citizens.

If at least 25% of a company’s capital or voting rights belong to Russian or Belarusian nationals, or if they are ultimate beneficial owners, the restriction applies. Narrow exemptions exist for EU permanent residents and inheritance cases, with transitional provisions for ongoing transactions.

Latvia’s model ties real estate regulation directly to economic security, recognising that concentrated ownership by hostile actors can serve as a tool of indirect pressure.

Ukraine still lags behind

Ukraine, by contrast, still lacks a clear legal framework to prevent property ownership by citizens or entities from aggressor states. Before 2014, Russians were active buyers in Crimea, Odesa and Kyiv, often purchasing seaside homes or investment apartments. Even after the annexation of Crimea, such transactions continued until 2022.

While administrative restrictions and sanctions have since curbed these deals, a comprehensive legal ban remains absent. Experts argue that Ukraine needs to follow the Finnish and Latvian examples by introducing an explicit legislative prohibition on real estate acquisitions by nationals and companies of aggressor states, as well as by those under their control.

The obligation to adopt such a law was established three years ago but has yet to be fulfilled. Though included in the 2025 legislative plan of the Verkhovna Rada and the Cabinet of Ministers, it was quietly dropped during the latest update.

Finland and Latvia, countries not at war with Russia, have nonetheless recognised that restricting high-risk property transactions is a matter of national defence. For Ukraine, still facing full-scale invasion, adopting similar measures is not only justified but long overdue.

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Svitlana Hordiienko, Legal Analyst, Institute of Legislative Ideas

This article was produced by the NGO Institute of Legislative Ideas with support from the Askold and Dir Fund, administered by ISAR Ednannia as part of the project “Strong Civil Society of Ukraine – a Driver of Reform and Democracy”, funded by Norway and Sweden. The content is the sole responsibility of the Institute of Legislative Ideas and does not necessarily reflect the views of the governments of Norway, Sweden or ISAR Ednannia.

Alonger version of this article in Ukrainian can be found here.

Caption: Riga, Latvia/pixabay.com