From all types of right of first refusal those given to the local municipalities is the most controversial, as it significantly hinders real estate transactions and constitutes an excessively burdening formality in real estate transactions. Procedure of exercising right of first refusal on real estate differs in countries across the globe. In Latvia the following conclusions can be drawn regarding the right of first refusal of local municipalities: 1) local municipalities exercise right of first refusal in very rare cases; 2) the local municipalities lack funds to use the right of first refusal; 3) employees of the local municipalities believe that right of first refusal are introduced to implement municipal functions, they are laid down in the law and hence they are legally grounded and necessary; 4) employees of several local municipalities think that right of first refusal of local municipalities does not impede transactions. During the research data were obtained from local municipalities regarding the number of cases when the right of first refusal were exercised between 2015 and 2020. At the end of the research, the main conclusion was - there is a proven basis to abolish municipality real estate right of first refusal in Latvia. Legislation in Latvia was amended and the right of first refusal of municipality is canceled from January 1, 2023.