Amendments in force as of 1 November 2014
Amendments to the law On Land Privatisation in Rural Areas provide for imposing limitations on the acquisition of agricultural land. It has been determined that one natural person or legal entity can obtain up to 2,000 ha agricultural land and associations and establishments listed in the register of associations and establishments of the Republic of Latvia can obtain up to 5 ha. In addition, in their binding regulations, municipalities can also determine a smaller maximum area of agricultural land that can be obtained by one person. Groups of persons must likewise meet these additional conditions before obtaining agricultural land. These conditions are verified when the person buys the real estate; however, there are no regulations and consequences for when a person who has already obtained agricultural land fails to meet any of the conditions or does not fulfil any of the future promises.
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These additional conditions can be ignored only in special cases:
- acquirers of agricultural land who own or legally possess agricultural land that does not exceed 10 ha in total for natural persons and 5 ha for legal persons;
- for agricultural land that is obtained in insolvency proceedings or by inheritance;
- for agricultural land obtained by the person under the Law on Alienation of Public Person's Property;
- for transactions of agricultural land between spouses, and relatives of the first and second degrees;
- joint owners of the land if the right of first refusal is used.
Despite these limitations, persons still can lease agricultural land. However, the lease term cannot be shorter than five years and the lease agreement needs to be registered in the register kept by the municipality.
The amendments introduce a special regulation also in relation to the rights of first refusal. They state that the rights of first refusal are provided for joint owners, as determined in the Civil Law, and also for the lessee if the lease agreement has been registered at the municipality. In turn, the Land Fund of Latvia obtains the rights of first refusal only if neither of the mentioned parties uses them.
The Land Fund of Latvia, which aims to facilitate protection and availability of agricultural land resources, as well as the rational and sustainable use and maintenance of agricultural land, will begin operating on 1 July 2015 at the latest. The fund will own the agricultural land accumulated at the national level.
By 30 October 2014, the Cabinet of Ministers must issue regulations that will specify in detail the process of transactions for agricultural land. The regulations that give a procedure to calculate income from agricultural production must be adopted by 30 June 2015.