Apartments Without Sale and with Rent Ceiling: What the New Law Changes

The Saeima begins to consider in the final reading a new draft law on the right to build residential rental houses on land owned by the state or local governments, writes Latvijas Avīze.

These houses built by private enterprises can then be rented out by local governments, including to those who receive apartments as part of social assistance.

The draft law prepared by the Saeima's Committee on State Administration and Local Governments stipulates that the right to build will be granted for 70 years. The constructed houses cannot be divided into separate apartment ownerships or sold in parts. After the expiration of the building rights, the constructed houses will be transferred free of charge to the ownership of the state or local governments, in order to prevent the emergence of new so-called divided ownership, where the land belongs to the state or local government, while the house built on it belongs to another owner.

As explained by the Saeima's Committee on State Administration and Local Governments, the new law is necessary to attract developers and private construction contractors to build rental houses. Currently, on land owned by the state or local governments, only engineering structures and buildings not intended for habitation can be constructed. This law aims to promote the construction of new rental apartments in cities and regions.

In 2025, the Ministry of Economics established that the rent for these apartments should not exceed 6.47 euros per square meter per month. However, this year the rent ceiling has been raised to 6.71 euros per square meter per month.

With the support of the financial development institution "Altum" and the European Recovery Fund, multi-story rental houses are currently being built or have already been built in several cities in Latvia at the request of local governments. In October of last year, the first two rental houses with 120 apartments were opened in Valmiera, for which the rent set by the local government is 6 euros per square meter per month. For example, for renting a furnished two-room apartment (40.46-44.02 sq. m), the tenant must pay 260 euros per month, plus expenses for water, electricity, and heating. Last year, the first low-rent house with 58 apartments was opened in Jelgava. The construction of a rental house with 56 apartments in Cēsis is planned to be completed by mid-2026.