Agricultural land buyers will have to know Latvian

The Saeima, during a second reading of amendments to the Law “On the Privatization of Land in Rural Areas”, decided that foreigners who buy agricultural land in Latvia will have to know Latvian. The Saeima adopted the amendments to the law in the final reading on March 23, but the President of Latvia sent them to the parliament for a second reading.

The changes are intended to strengthen the state language requirements for foreigners who want to purchase land in Latvia. It is stipulated that foreigners will have to know the state language at least at level B level 2. In the version previously supported in the Saeima, both individuals and legal entities were required to know the Latvian language at least at level A level 1 and to present a plan for the future use of the land in agriculture in the state language, as well as answer questions from the municipal commission.

The requirements for presenting a land plan to municipal commissions have also been clarified. Previously, the parliament decided that this would apply to all transactions, but today the Saeima decided that municipal commissions will be able to request it only if necessary. The amendments provide that municipal commissions will be able to invite persons to present the future use of land in agricultural activities in the official language, if necessary.

The amendments, among other things, provide for the exclusion from the law of the condition that land may be purchased by persons who have received direct payments from the European Union for at least the last three years. The provision that requires farms or companies to make a condition for the purchase of land that income from agricultural production must constitute at least one third of the total income from economic activity for the last three years has also been excluded. Legal entities will also no longer be required to have at least one owner or permanent employee with appropriate professional education. The European Commission has initiated infringement proceedings against Latvia regarding these provisions, on the grounds that the restrictions must be proportionate and must not discriminate against other EU citizens.

To make land acquisition easier for domestic farmers, it is planned to change the procedure for pre-emptive rights. If the owner wishes to sell his land, the land lessee and the manager of the Latvian Land Fund will have the pre-emptive right to it. Currently, the law provides for the following norm - if a joint owner sells his share of land, the joint owners of the land have the pre-emptive right.

Starting in 2018, municipalities will be able to lease undeveloped agricultural land with the right to purchase. The land will be leased for a period of up to 12 years, with an annual lease fee of 4.5 percent of the land's cadastral value. A natural person who will begin land management within a year of concluding the lease agreement will be eligible for this land purchase procedure. The land will be redeemed no earlier than in the fourth year.

To prevent the concentration of many thousands of hectares of agricultural land in the hands of one or closely related people, the land acquisition procedure has been supplemented with a new restriction - related persons will henceforth be allowed to acquire ownership of up to 4,000 hectares of agricultural land. Municipalities will be able to set their own restrictions based on development priorities.

The changes stipulate that local governments will have to maintain a register of land acquisition transactions. This will apply to those transactions that were concluded by October 31, 2014 and have not been registered in the Land Register by June 30, 2017. The register will indicate the subject of the transaction and the date of conclusion of the contract, and it will be publicly available on the websites of local governments. For such transactions to be recorded in the Land Register, a certificate from the local government commission on the registration of the transaction in the municipality by December 31, 2017 will be required. In turn, from January 1, 2018, such transactions will be valid for recording in the Land Register only if they are accompanied by a decision of the local government commission on consent to the acquisition of agricultural land in ownership.

Control of compliance with land acquisition conditions has also been clarified. From now on, municipalities will have to verify the fulfillment of written confirmations regarding the use of land for agriculture.

The changes will come into effect on July 1 of this year.

The President of Latvia, without announcing amendments to the law, had argued that the language requirement was inconsistent with presentation skills, and that clear criteria for evaluating the presentation of a land plan in municipal commissions had not been established. The President of Latvia has also indicated that the requirements of the law should not complicate the opportunities for Latvian farmers to acquire new agricultural land and develop.

On March 23, the Saeima adopted amendments to the law in its final reading, which were intended to clarify the procedure for purchasing agricultural land. The changes were necessary because the EC has objected to the current regulation of the agricultural land market in Latvia.