LATVIA Law and Practice Contributed by: Jānis Kārkliņš, Annija Kārkliņa, Ēriks Krēsliņš and Rihards Strads, BERG
Finally, investors should consider tax law (eg, transfer taxes and capital gains), as well as environmental and compliance regulations, which may impose obliga - tions or restrictions on the use of the property. 2.7 Soil Pollution or Environmental Contamination In Latvia, a buyer of real estate may, in certain cir - cumstances, become responsible for soil pollution or environmental contamination, even if they did not originally cause it. Under Latvian environmental law – the primary princi - ple is that the polluter is responsible (“polluter pays”). However, if the original polluter cannot be identified or held liable, responsibility may shift to the current owner or possessor of the property. This means that a buyer can inherit environmental liabilities together with the land. As a result, owners may be required to remediate con - tamination, limit environmental harm or comply with regulatory orders, regardless of fault. These obliga - tions are typically administrative in nature and aimed at protecting public health and the environment. If the owner neither knew nor could have known about the polluting activities, it would be disproportionate to impose full liability for damages. To sum up, while liability is not automatic in every case, buyers should assume that environmental risks can attach to the property itself and therefore to its owner. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law In Latvia, a buyer determines permitted use mainly through local planning documents under the Spatial Development Planning Law. The primary sources are municipal spatial plans and zoning regulations, which define allowed uses (eg, residential or commercial) and development condi - tions. These are publicly available, and buyers often obtain an official statement from the municipality for confirmation. More detailed rules may be found in local or detailed plans ( detālplānojums ).
For development, investors may co-operate with municipalities and conclude administrative agree - ments, particularly in larger projects, to address plan - ning conditions or infrastructure. 2.9 Condemnation, Expropriation or Compulsory Purchase In Latvia, expropriation of real estate is possible, but is strictly regulated and used only in exceptional cas - es. The main legal basis is the Law on the Alienation of Immovable Property Necessary for Public Needs, together with constitutional protections of property rights. Expropriation of immovable property in Latvia may take place for public needs, including State protec - tion, environmental and health protection, and social security, as well as the construction of cultural, edu - cational and sports facilities, engineering structures and communications, and the development of trans - port infrastructure or other public purposes, provided that the objective cannot be achieved by other means. It must be justified, proportionate and carried out in accordance with the law. The process typically begins with an attempt to reach a voluntary agreement with the owner. If this fails, a formal expropriation procedure is initiated by the com - petent public authority. A decision is then adopted, often at government level, specifying the public pur - pose and the property concerned. A key requirement is fair compensation, which must be paid to the owner. Compensation is usually based on the market value of the property and may include losses directly related to the expropriation. The own - er has the right to challenge the decision and/or the amount of compensation in court, ensuring judicial protection. Overall, while expropriation is legally possible in Lat - via, it is relatively rare and subject to strict safeguards to protect property owners. 2.10 Taxes Applicable to a Transaction In an asset deal in Latvia, a state fee is generally payable for registration of title in the Land Register, together with a clerical fee for the relevant entry. The
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