Real estate tax deductions
As with the rates, the real estate tax deductions are determined by each municipality separately. In this, they are obliged to follow certain principles:
- objectivity in choosing those who receive the deductions
- balance of the deductions and incoming taxes
- responsible management of the budgets
- stability and predictability of any deduction plans
Additionally, they can be motivated by the following aims:
- business support
- development of the respective municipal area
If a municipality chooses to deduct a certain portion of the real estate tax for a particular person, it may deduct 90%, 70%, 50% or 25% of the total tax sum to be paid. This is applicable only if not contrary to any higher-tier laws.
Guaranteed deductions
There also are certain situations, in which real estate tax deductions are guaranteed by the law On the real estate tax (in Latvian: Par nekustamā īpašuma nodokli):
| Status | Deduction |
|---|---|
| Natural persons legally classified as suffering from poverty (in Latvian: trūcīgs) | 90% of the total real estate tax sum (the actual classification of ‘poverty’ is still dependent on each separate municipality) |
| Natural persons legally classified as having low income (in Latvian: maznodrošināts) | Up to 90%, depending on the decision of a particular municipality (the actual classification of ‘low income’ is still dependent on each separate municipality) |
| Natural persons with 3 or more children of up to 18 years old (or up to 24 years old if this particular child is receiving secondary, higher or vocational education) | 50% but no more than 500 EUR (residential property only) |
| Politically persecuted (repressed) persons | 50% for property that is not used for economic activities |