Forest land is not a building plot. Before you put a house on it or turn it into a field, you have to deforest it legally: a competent authority's permit plus compensation to the state. We break down the Cabinet Regulation No. 889 formula, why growing forest elsewhere cuts the bill many times over, and show two calculations with real numbers.
Deforestation is not logging
Say you have bought a small forest plot near a town and you plan to build a house there. The logic seems simple: fell the trees, pull the stumps, start building. In practice one step stands in the way, and buyers often learn about it too late — deforestation (in Latvian, *atmežošana*).
Deforestation is not the felling of trees. It is a legal act: converting forest land into another land-use type. Land registered as forest in the State Cadastre becomes, after deforestation, building land or agricultural land, for example. The trees are cut only after the legal process is complete. Deforestation can even be required when there is not a single tree on the plot — what matters is the land's status in the documents, not what grows on the ground.
To deforest, you must meet two conditions at once. First, a competent authority has to issue an administrative act granting the right to the activity — a building permit, a mineral-extraction permit, or a decision to set up agricultural land. Second, you must compensate the state for repairing the negative effects of deforestation; that is the deforestation compensation. There is one more prerequisite: the property must have a valid forest inventory.
When deforestation is allowed at all
Forest land is not converted at the owner's whim. The Forest Law permits it only for specific purposes:
If your purpose is not on that list, deforestation is not available — you cannot simply decide the forest is no longer wanted. On top of that, the activity must not be prohibited on the specific site by nature-protection or forest-management rules. If the plot sits somewhere construction is banned anyway, calculating the compensation changes nothing.
- construction;
- mineral extraction;
- setting up agricultural land;
- restoring specially protected biotopes;
- state defence needs.
How the compensation is calculated
The amount is set by Cabinet of Ministers Regulation No. 889. The base formula is:
Z = S × A × KCO2 × K1 × K2
The formula looks complicated, and it is: two coefficients depend on where the plot lies and one on the forest type. In practice that means a plot of the same size in a city and in the countryside will cost markedly different amounts.
- Z — the compensation (euro);
- S — the area to deforest (ha);
- A — the average forest regeneration and tending cost (euro/ha) from Central Statistical Bureau data: the previous five years' average cost of soil preparation, seedlings, planting and tending, by forest-land quality group;
- KCO2 — a coefficient for the reduced CO₂ sequestration potential, depending on forest type: from 6 in the poorest types (bog pine, treed bog) to 20 in the most fertile (damaksnis, vēris, gārša);
- K1 — a coefficient for the forestry-activity restriction: 1 where there is none, rising to 20 in sensitive areas (for example the coastal-dune protection zone). In an urban forest it is 10, in a nature reserve 10, in a microreserve buffer zone 3, in a sanitary protection zone 2;
- K2 — a coefficient for the purpose of the deforestation: 1.0 for ordinary construction, but lower for some purposes (for example, 0 for an investment project co-financed by the state or the EU).
Grow forest elsewhere — and the bill drops many times over
There is one dominant lever on the cost. The loss of CO₂ sequestration can be fully offset by growing new forest somewhere else — on your own land or someone else's. That forest is called the offset stand. It must be at least 0.1 ha if it adjoins existing forest, or at least 0.5 ha if it stands on its own. An offset stand qualifies if the State Forest Service (VMD) has recognised a planted or sown stand as established no earlier than five years ago, or a naturally regenerated pine, spruce or birch young stand at least two metres tall that VMD has recognised as tended.
If you offset the carbon loss by growing forest, the formula becomes much simpler — and cheaper. With no forestry-activity restriction (K1 = 1):
Z = S × 142.29 × K2
If the calculated amount is below €35.57, you pay the €35.57 minimum. If there is a restriction (K1 > 1):
Z = S × 2,845.74 × K1 × K2
The difference is fundamental. If you do not grow forest, KCO2 (up to 20) multiplies the regeneration cost and the bill climbs fast. If you do grow forest, a fixed constant replaces the carbon term. That is why the decision about the offset stand often shapes the cost more than anything else.
Two worked examples
To make the difference concrete, take the same plan in two places. In both cases the owner deforests 0.12 ha for a house and yard and grows an offset stand elsewhere, so the simplified formula applies. For construction, K2 = 1.0.
Example A — rural plot, no restrictions. The forest is not in any protection zone or specially protected area, so K1 = 1. The calculation: 0.12 × 142.29 × 1.0 = €17.07. Since that is below the minimum, the compensation is €35.57. The real spend here is not the state compensation but growing the offset stand, felling the trees and handling the paperwork.
Example B — the same plot inside a city forest. For an urban forest, K1 = 10. Now the restricted formula applies: 0.12 × 2,845.74 × 10 × 1.0 = €3,414.89. The same house footprint costs nearly a hundred times more, purely because the plot lies within city limits. The same logic applies in the coastal-dune zone (K1 = 20) or a nature park (K1 = 10).
The takeaway for a buyer is simple: before buying forest land to build on, find out not only the area but whether the plot falls inside a restricted area. That is what decides whether the compensation is tens or thousands of euros.
The process, step by step
- Application to VMD. The owner or an authorised person requests the compensation calculation. If the deforestation is for construction, from 1 January 2026 the application goes through the Construction Information System (BIS).
- Attachments. The application includes a sketch of the area with the polygon drawn (in .shp format), the administrative act (if deforesting for mineral extraction or agricultural land), and details of the offset stand if one is used.
- Calculation. VMD calculates the amount within ten working days, provided the application is complete and the activity is not prohibited on the site. If documents are missing, it allows 30 days to supply them.
- Payment. For construction, the compensation is paid after the building permit is marked as having met its design conditions and has become non-contestable. For mineral extraction or agricultural land, it is paid before the felling permit is issued or before work begins.
- Felling and closure. Only after the compensation is settled can you obtain a felling permit and physically cut the trees, with a VMD representative present who records the change and updates the cadastre.
Two things deserve separate attention. If deforestation would leave less than 0.5 ha of forest on a single land unit, the compensation is calculated and the land-use type changed for the whole forest area (with some exceptions). And unauthorised deforestation — without a permit and without compensation — ends with VMD recovering the compensation regardless of when the breach is found.
What it means for buying and selling
For a buyer, deforestation is a hidden cost that is easy to forget. If you buy a plot intending to build, the price has to include not just felling but the compensation, the offset stand and the paperwork. A listing that calls forest land "a great spot for a house" means the buyer inherits that entire process.
For a seller there is the other side. If the plot is pitched as building potential, it is more honest to say so plainly: the land is forest, and the buyer will have to reckon with deforestation. Staying quiet about it becomes an argument in the price negotiation later.
This is exactly where MezaData saves the first hour. For every compartment we show whether the land is registered forest at all (the zone category `zkat`), its area (`nog_plat`, which is the S in the formula), and its location. It does not replace the official VMD calculation, but it lets you tell in seconds whether a plot is forest that will need deforesting before you build, and how large the area to convert is — before you spend a single euro.
FAQ
Are deforestation and felling the same thing?
No. Deforestation is a change of the land's status in the documents, and it comes first. Felling follows once a felling permit is issued. Deforestation can be needed even when there are no trees left on the plot.
What does it cost to deforest a plot for a house?
It depends on the area, the forest type, the purpose and — above all — whether the plot is in a restricted area and whether you grow forest elsewhere. For a rural plot with no restrictions and an offset stand it can be close to the minimum (€35.57), but the same area inside a city forest already runs to thousands of euros. VMD calculates the exact figure.
What happens if you deforest without a permit?
That is unauthorised deforestation. VMD sets the compensation and recovers it for the state regardless of when it is discovered. There is no saving here — only risk.
Sources
- VMD — Atmežošana — the concept of deforestation, the permitted purposes, the compensation procedure, the offset stand, and the consequences of unauthorised deforestation (updated 11 February 2026).
- likumi.lv — Cabinet Regulation No. 889 "Rules on the criteria, calculation and payment of deforestation compensation" — the compensation formulas (Z = S × A × KCO2 × K1 × K2; the simplified B1 = €142.29 and B2 = €2,845.74/ha; the €35.57 minimum), the coefficient values in the annex, and the filing procedure (redaction in force from 1 January 2026).
- Central Statistical Bureau table MEP010 — forest regeneration and tending costs (EUR/ha) — the source for the A coefficient by forest-land quality group.