New arrangements for the disposal of agricultural land

As of 1 November 2014, amendments to the Law on Land Privatisation in Rural Areas have entered into force, which provides for a new approach to legal regulation in transactions with agricultural land. The amendments aim to preserve agricultural land for production as well as to reduce speculative land-based transactions.
The law is supplemented by a number of articles which determine which persons may acquire agricultural land and have pre-emptive rights.
The land will be acquired by natural persons who will meet all the conditions:
- registered as performers of economic activity in the Republic of Latvia;
- in the last three years, the single area payments or (as from 1 July 2015) direct payments or their revenue from agricultural production shall represent at least one third of their total economic revenue for the last three consecutive years. Have acquired agricultural education or equivalent education in vocational education programme, vocational secondary education programme or vocational development education programme, acquiring crop, animal husbandry or other relevant objects in the amount of not less than 160 hours;
if the land is applied for flat-rate payments or direct payments, it shall be confirmed in writing that the utilisation of such land in agricultural activity will be commenced within a year after the acquisition thereof and will be processed in the future. If the land is not eligible for aid until the acquisition, the processing must be undertaken within three years;
- there is no tax debt in Latvia or in the country where they are habitually resident.
Legal persons will be able to purchase land if the following conditions exist:
- in the last three years, the single area payments have been received or (as from 1 July 2005) their revenue from agricultural production shall represent at least one third of their total economic revenue for a period of not less than the last three consecutive years;
- certify in writing that the use of this land in agricultural activity will be commenced within a year after its acquisition and will continue to be ensured if the land has been applied for in the single area payments or direct payments. If the land is not eligible for aid, it will be processed within three years and will continue to be processed;
- one owner or permanent employee has appropriate vocational training in the relevant field of activity of the legal person obtained in the vocational education programme or vocational secondary education programme;
- there is no tax debt in Latvia or in the country where they are registered.
The requirements of the new law shall not apply to:
• the beneficiaries of agricultural land in which the area of agricultural land in ownership or lawful possession at the time of entering into the transaction and after the transaction in total does not exceed ten hectares for natural persons and five hectares for legal persons;
• agricultural land to be obtained in insolvency proceedings;
• agricultural land to be obtained by inheritance;
• agricultural land necessary for the provision of State or local government functions, as well as agricultural land acquired by the State capital company for the implementation of delegated functions;
• agricultural land which is acquired by a person in accordance with Section 4, Paragraph four, Clauses 3, 4, 7 and 8 of the Law On Assignment of Property of a Public Person;
• transactions with agricultural land between spouses, first and second-degree relatives (parents, children, grandparents, sisters and brothers);
• agricultural land which is disposed of in the land consolidation process under regulatory enactments regulating land management
The Law also includes Article 301, which defines who has the right of pre-emption to agricultural land.
If an agricultural land owner sells a part of the land belonging to him, the pre-emption right to the agricultural land to be disposed of shall be the owners of the land. A person who is a lessee of an agricultural land shall have the right of pre-emption to the land to be alienated if the land lease contract is registered in the relevant local government. In such a case, the lessee of the agricultural land shall have the right of pre-emption to the agricultural land to which the pre-emption right is not utilised by the land owner. Local government land lease contracts entered into before 30.12.2014 shall be registered in the register of lease agreements of agricultural land within six months, i.e. until 30.6.2015. The amendments to the Law also stipulate that an agricultural land lease contract shall be entered into in writing for a period of not less than five years.
The Law on Land Privatisation in Rural Areas can be found in the portal www.likumi.lv.
Evaluation of transactions with agricultural land
30.12.2014 the Cabinet Regulation No. 748 of 2 December 2014, Regulations Regarding Decision-Making for Transactions with Agricultural Land, which has been issued pursuant to Section 30.1, Paragraph four, Clauses 1, 2, 3, 4, 5, 7 and 8 of the Law on Land Privatisation in Rural Areas, entered into force. These Regulations prescribe the criteria for determining the dominant land use category in transactions with agricultural land; in the submission regarding the information to be included in the transaction with agricultural land and the documents to be appended thereto; the procedures by which the lessee of the agricultural land and the manager of the Latvian land fund shall implement the pre-emption rights.
For agricultural land buyers, LR and EU citizens with more than 10 ha of agricultural land, it will be necessary to fill in a special submission form that will indicate the purpose of the future use of the land to be purchased, certify that the land will be used for agricultural activity, that the agricultural education or equivalent education is obtained, that the single area payments (after 1 July 2015) are received, or there are revenue from agricultural production. Purchasers of agricultural land - both natural and legal persons, must be registered as performers of economic activity in the Republic of Latvia. On the day of submission of the submission, they will not be able to have a tax debt in the Republic of Latvia.
The submission shall be accompanied by a copy of the transaction document regarding the acquisition of agricultural land, a copy of the educational document certified notarially or a copy of the educational document, presenting the original, if it is necessary to certify the conformity of the education with the conditions of Section 28.1, Paragraph one, Clause 1, Clause 1, Sub-paragraph 1, Clause 1, or Section 2, Sub-paragraph c of the Law on Land Privatisation in Rural Areas; for non-residents - a document regarding payment of taxes in the State where the habitual residence is or is registered. For associations and foundations, a certified statement from the statutes on the purpose of the operation.
A legal person shall have the conditions that at least one owner or permanent employee must have adequate vocational training in the field of activity of the legal person concerned, obtained not less than in the vocational education programme or vocational secondary education programme, or (as from 1 July 2015), at least one owner's income from agricultural production shall represent at least one third of its total economic activity for a period of not less than the last three consecutive years, but as from 1 July 2015, that, at least a year over the last three years, the single area payments are received under Regulation No 73/2009 or receive direct payments in accordance with Regulation No 1307/2013, or their revenue from agricultural production shall represent at least one third of their total economic revenue for the last three consecutive years. Similarly, legal persons must certify in writing that the use of this land in agricultural activity will be commenced within a year of its acquisition and will continue to be ensured if the land has been applied for in the previous or current year for the single area payments or direct payments, or will be commenced within three years and will continue to be provided if the land has not been applied for in the previous or current year for the single area payments or direct payments, as well as the actual beneficiary must be indicated.
A person may choose to purchase agricultural land as a natural person or as a legal person. Depending on whether a person wants to buy land as a natural person or as a legal person, it must fulfil one of the relevant conditions. Owners of farms who purchased agricultural land that natural persons do not need to register as performers of economic activity.
The decision on the acquisition of agricultural land shall be taken by the “Commission for the supervision of the legality of transactions carried out with agricultural land” after evaluation of the documents submitted and receipt of the necessary data from other State information systems. The Commission will prepare a statement, which will be signed by the President of the Commission, to be submitted to the Land Registry Office of Rezekne. A transaction act regarding the acquisition of agricultural land will be registered in the Land Registry Office only if a statement issued by a local government is attached.
In order to facilitate the process of filling applications, the submission forms for natural and legal persons are attached in the Annex.
The information was prepared by:
Vadims Čuhnovs
Rezekne District Municipalities 
Legal and Registry Officer
N.64607171 Fax: 64625935
Email: vadims.cuhnovs@rezeknesnovads.lv
Form for natural persons
Form for legal entities