According to the amendments to the Law* adopted by the Parliament, building owners (including apartment owners and joint owners) who use the land are now required to pay the legally prescribed land use fee to the landowner for the right to use the land as well as cover the costs of preparing and sending the payment notice (invoice).
Currently, apartment owners will need to make an initial payment of 15 euros, but the municipality is working on developing a system by the end of the year that would allow for a reduction in this fee and offer a more favourable solution for both parties, such as allowing those who prefer to receive the notification by email.
Legal use of land means that the landowner has the right to receive, and the building owner has the legal obligation to pay, the fee for the right to use the land. The legal use fee is set at 4% of the cadastral value of the land in use per year, but it must be no less than 50 euros annually.
The Law stipulates that each building owner (joint owner or apartment property owner) is responsible for covering the annual cost of preparing and sending the payment notice, which amounts to 15 euros. The Law also stipulates that if there is a delay in paying the use fee, the debtor must compensate the landowner for the costs incurred in recovering each delayed payment, amounting to 30 euros, unless the delay is due to the landowner's own fault.
Thus, the municipality will send legal land use fee invoices to individuals who are obliged to pay the legal land use fee for plots of land owned, held, or controlled by the Riga municipality, which will include both the payment deadline and information about the current account to which payment is to be made, as well as other information relevant to this payment. In the near future, the municipality will send land users invoices for the cost of preparing and sending the payment notice, which amounts to 15 euros per year (for 2024).
Additional information on the legal framework
The inclusion of such fees in the Law is related to the judgement of the Constitutional Court on May 2, 2023, which recognized that the legal use fee of 4% per year does not fulfil the function of compensation. The Constitutional Court considered that the determination of the current (i.e. in the version of the Law that was in force from 1 January 2022 to 30 June 2024) amount of the use fee does not take into account expenses that reduce the landowner's income from the land transferred for use (additional management expenses and litigation expenses, if the owner of the structure does not pay the use fee voluntarily, which the landowner must pay from the received use fee).
The annotation of the draft law states that the aspects highlighted in the Constitutional Court's judgement have been evaluated, and the legal regulation of land use rights has been improved in certain areas through this draft law, reducing the burden on landowners while maintaining a reasonable balance of rights and obligations between the parties involved in this legal relationship, thereby ensuring the implementation of the Constitutional Court's judgement.
Amendments to the Law introducing the new legal institute of legal land use were adopted in 2021, allowing for a transition period of more than two years until the legal land use fee comes into force on January 1, 2024, concerning land plots owned by the municipality.
A municipality is a public person, and the process by which a public person utilizes land legally is governed by the Law “On the Time Period of Coming into Force and the Procedures for the Application of the Introduction, Parts on Inheritance Rights and Property Rights of the Renewed Civil Law of 1937 of the Republic of Latvia” (Section 38 and 42) and Cabinet Regulations. According to the Regulations, for the legal use of a built-up plot of land, the institution of a public person in possession or management (ownership) of the relevant plot of land sends a payment notice or an invoice prepared in accordance with the requirements specified in the Regulations to the owner of the building (apartment property owner, joint owners).
*The Second Paragraph of Section 38 of the Law “On the Time Period of Coming into Force and the Procedures for the Application of the Introduction, Parts on Inheritance Rights and Property Rights of the Renewed Civil Law of 1937 of the Republic of Latvia”.
** Cabinet Regulation No. 350 of 19 June 2018 “Regulations of land lease and building rights of a public person”, Paragraph 8.2.
Information was prepared by: Ineta Miglāne, project coordinator, Riga City Council Communication Administration External Communications Department, e-mail: ineta.miglane@riga.lv.