Real estate tax
Real estate tax (in Latvian: nekustamā īpašuma nodoklis) is a tax imposed on real property and paid by the owners of said property. It is governed by the law On the real estate tax (in Latvian: Par nekustamā īpašuma nodokli). It indicates, that the tax is imposed on physical objects that are located within the territory of the Republic of Latvia and cannot be moved from one place to another without explicitly damaging them - land, buildings (including registered ones, even if they are not in use), and infrastructure.
Real estate tax rates depend on two factors: state defined tax margins and the decision of each municipal (local) government. You can see a detailed summary of possible combinations in the real estate tax rate table, as well as possible deductions in the tax deductions table.
The law defines that the base real estate tax rate can vary from 0.2% to 3% of the cadastral value of a residential property, but it can be higher than 1.5% only if the building is in a condition which makes it unfit for use, e.g. it is classified as ruins (in Latvian: grausti). The actual tax rate for each property is defined by the relevant municipal government, but it must be within these limits.
If the municipal government does not stipulate the tax rate, the base rate is applied. For residential properties with a cadastral value of 56 915 EUR or less it is 0.2%, 56 915 EUR to 106 715 EUR - 0.4%, higher than 106 715 EUR - 0.6%. For land it is 1.5%.
The cadastral values used to determine the actual rates are defined by the government on a year-by-year basis. In 2018 and 2019 the value database of 2016 is to be used. Additionally, during these two years, any land that is at least partially designated to have residential property on it and is also registered as a cultural heritage property will have its value reduced by 30% for the purposes of real estate taxation.
Payment procedure and terms
The notification about the amount of tax to be paid is sent to the payer until February 15th of each year, except for car parking lots, notifications for which can be sent until August 1st. In case a taxpayer has not specified his/her address of residence or any other means of reaching him/her, and also has not informed related authorities about not receiving the notification in due time, the notification is not sent, but the calculated tax is considered approved and to be paid on March 22nd of the same year.
The yearly amount of tax can be paid in four parts, not later than March 31st, May 15th, August 15th and November 15th respectively. Any of these payments can also be made in advance, meaning that it is also possible to pay for the whole year with one payment. A single payment, however, does not mean the extension of payment dates - they remain the same in any case.
As is with other taxes, the real estate tax can be paid electronically. This is done via the official Electronic services website https://www.epakalpojumi.lv/. On this website, upon logging into your account, a taxpayer is presented with a summary of his/her taxes, or notified that he/she has no taxes to be paid.
In case a taxpayer has a real estate tax debt and must also pay the tax itself, there is a certain sequence in which his/her payments are received:
- tax payments overdue after October 1st, 1999
- fines that are not yet overdue in the month they are made
- tax payments that are not yet overdue in the month they are made
- subsequent tax payments
- tax payment that have become overdue before October 1st, 1999
For a property owner this means that debts and fines are covered first, and only then it is possible to pay the tax itself. Subsequently, while old debts and fines have not been paid, it is a lot easier to accumulate new ones, so it is recommended to plan the payments appropriately.
As stated at the beginning of the article, real property tax is imposed on physical objects that are located within the territory of the Republic of Latvia and cannot be moved from one place to another without explicitly damaging them - land, buildings (including registered ones, even if they are not in use), and infrastructure. There is, however, a number of exceptions - objects that fit the aforementioned definition, but are exempt from the tax:
- residential property auxiliary buildings with an area smaller than 25 m2, except garages (or those with a wider area but have been declared exempt form the tax by municipal authorities)
- buildings and infrastructure that are used solely for the purpose of agricultural production
- municipal property used by municipal councils, as well as properties financed by municipal councils and located on municipal territory. This includes any property that has been leased or transferred for the purposes of administration from municipalities to other parties and are used to provide medical or social security services
- property belonging to another country, if it is used for the purpose of official representation (e.g. embassy), provided that the relevant Latvian property in that country enjoys the same rights
- governmental and municipal property used to provide regulated public services
- public infrastructure, e.g. roads, sewer systems, street lighting etc.
- private infrastructure that is not used for commercial purposes
- religious property that is not used for commercial purposes
- land used for nature preserves with forbidden commercial activity, as well as any property on that land that is needed for the process of preservation
- national sport complexes and facilities, as well as their respective land
- other constructions that are used by the government in accordance with the the law On the real estate tax