State Audit: Municipal property sales often driven by budget gaps, not long-term planning
Latvia's State Audit finds that municipalities frequently sell properties to cover annual budget shortfalls rather than based on strategic development plans. A lack of unified records and incomplete land registration hinder effective management.
The State Audit of Latvia has concluded that municipal real estate constitutes one of the largest public resources in the country – nearly 212,000 properties worth €4.7 billion. However, their management is often short-sighted and fragmented.
According to the audit, many municipalities lack complete and up-to-date information on property status, condition, and use. Without such data, it is difficult to make informed decisions about which properties to keep, lease, develop, or sell. Only 15 municipalities have compiled full data on properties needed for their core functions.
Concerning findings relate to property alienation: from mid-2021 to early 2026, municipalities conducted 14,165 transactions worth almost €180 million. 85% of revenue came from the sale of forest land. The auditors note that these decisions are often made to patch current-year budget holes rather than based on long-term assessments. An in-depth analysis of 106 land transactions in 21 municipalities showed that links to development goals were often untraceable.
A major issue is property registration: 57% (120,481) of municipal properties are not registered in the Land Register, restricting the ability to manage them. The audit also found that some sold properties were later resold at significantly higher prices – totaling over €170,000 – while 47 agricultural land parcels covering 352 hectares remained uncultivated.
The State Audit urges municipalities to adopt systematic property profiling and e-auctions to boost competition. Auditors will also address several ministries, calling for unified management principles, an integrated digital solution for public property data, simplification of title registration, and consultative support for municipalities. Separately, the need for a coherent national land policy is highlighted.
