The paper includes economic research results on the second stage of land reform over the 10-year period (1996–2006) in the districts of Latgale region. The results explicitly stress the region's variability, therefore, the results are different, but common trends can be also observed. The number of land users has decreased, whereas that of land owners and the area of privatised land have increased. The total area of used and owned land has increased by 33.4% and exceeded a million hectares.

The implementation of land reform has influenced the formation of property structure. The main procedures of land reform activities are stated in Estonian legislation. However, the provisions for determining the area and the boundaries for properties to be formed in the course of land reform are stated in legal acts in an unsystematic way. The aim of this study is to systematize the parcel area and the boundaries determination procedures that are used in the course of land reform for property formation. The examination of the relationships among different property formation procedures are part of this study. The methodology of the study was a systematic analysis of the property formation procedures provided by the Estonian Land Reform Act. The results of the study show that property formation during the course of land reform can be easy and simple in some cases. In other cases, property formation may be complicated. The determination of the area and boundaries of parcels to be formed is often an issue of discretion in such cases. The results of the study support the basis for better understanding land reform outcomes. It gives some explanation of the land fragmentation that is one of the outcomes of land reform. The results of the study also serve as a basis for future studies of land reform issues.

Before Latvia initiated the transition to market oriented economies, large collective units, which had the right to use the land, used most of the land but were not necessarily the landowners. This situation provided a special starting point for the return to the market economy in the agricultural sector. The government of Latvia decided to implement restitution of land ownership rights to former owners basing on historical boundaries as a method to privatise and open the land market. There were two processes going on at the same time: the restitution of private ownership rights to land, and the break-up of collective productive units. The restitution processes are the starting point for the development of land markets. Moreover, it represents a necessary condition to open land market. However, the place at which this land market opening is occurring depends on the way each government implemented the land reform.