Tax and legal news

New regulation for real estate tax in Riga

New regulation regarding the calculation of real estate tax (RET) in Riga administrative territory, laid down in Riga City Council Rules No. 148 “On real estate tax in Riga”, effective January 1st 2016.       

Starting from January 1st 2016 the yearly land tax will be 1.5% of the cadastre value.

The calculation of RET will be changed (if the real estate is not used for economic activities) for:

  • Individual apartments and one-apartment houses,
  •  2 or more apartment buildings, if not sub-divided into apartment properties,
  • Other premises and non-residential houses, which are used for residential purposes.

The new regulation of Riga City Council provides for reduced RET rates as follows:

  •  0.2% of the cadastre value if it does not exceed 57 000 euros,
  •  0.4% of the cadastre value for the amount that exceeds 57 000 euros, but does not exceed 107 000 euros,
  • 0.6% of the cadastre value for the amount exceeding 107 000 euros.

These reduced rates are applicable only if certain criteria are fulfilled:

 

Property is owned by
a private individual

Property is owned by
a legal person

Individual apartments and
one-apartment houses

- On the 1st of January of the year of taxation at least one person* has declared a place of residence at the property.

- On the 1st of January of the year of taxation at least one person* has declared a place of residence at the property;

- If the property is leased out for living, applicable from the month after registering the lease agreement at the Land Register.

 

2 or more apartment residential buildings, if not
sub-divided into apartment properties

For the part of the house and the part whose type of use is associated with living,  where:

- On the 1st of January of the year of taxation the place of residence is declared by persons*, assuming that each person is entitled to 50m2 in 2016 (40m2 in 2017 and 30m2 in 2018).

 

1.5% rate is applicable for the exceeding space (area).

For the part of the house and the part whose type of use is associated with living,  where:

- On the 1st of January of the year of taxation the place of residence is declared by persons*, assuming that each person is entitled to 50m2 in 2016 (40m2 in 2017 and 30m2 in 2018).

- If the property is leased out for living, applicable from the month after registering the lease agreement at the Land Register.

 

1.5% rate is applicable for the exceeding space (area).

 

*          Citizen or a non-citizen of the Republic of Latvia, citizen of other EU member state, EEA or Switzerland or a person having residence permit in Latvia.

To apply for reduced rates citizens of other EU member state, EEA or Switzerland or a person having residence permit in Latvia have to be declared at the given property 7 years prior to January the 1st of the  relevant taxation year. Once the person complies with this criteria, it will not be reassessed the years to follow.

 

  • For other real estate objects as well as objects used for economic activities the RET is calculated according to the Law On Immovable Property Tax.