Property Taxes and Exemptions in Latvia

Latvia grants citizenship and residence permit to foreigners who buy property if they meet certain conditions. Those who benefit from this opportunity have to pay property tax for their real estate. However, there are different exemptions for property tax in Latvia. Knowing about these exemptions will enable you to gain serious advantages. You can also make much more accurate planning for your investments by considering these exemptions. We have gathered for you all the issues you wonder about property tax, discounts, and exemptions in Latvia.

Property Tax Rates

The rate of property tax paid for the land and immovable varies according to different factors. These rates are generally as follows:

• 5% of the cadastral value for lands
• 5% of the cadastral value of buildings and engineering structures used for economic activities
• 2% for residences with a cadastral value less than €56.915
• 4% for residences with a cadastral value between €56.915 – €106.715
• 6% for residences with a cadastral value of more than €106.715
• Additional 1.5% for unprocessed agricultural land (excluding the ones less than 1 hectare)

These are the general details of the property tax. A 3% tax is levied by the municipality for the construction and structures that spoil the environment, demolish, and are in similar condition if determined in the binding legislation. For those who collapse, the tax base is considered the highest value of the land they are on. Another thing to know is that the minimum amount that each taxpayer will pay to local municipalities is 7 Euros. ^[1]

Local municipalities have the right to set tax rates between 0.2% and 3% by adopting binding regulation. In case a property is not preserved per the relevant laws and regulations, the tax rate of more than 1.5% is determined by the local municipality.

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Property Tax Discounts in Latvia

In some cases, the Property Tax Law includes clauses on tax discounts. These can be listed as follows:

• 90% for the poor,
• 50% for those who have 3 or more children, provided that it is not more than 436 Euros,
• Those under political pressure are given a 50% discount.

Local municipalities can make arrangements with discounts of 25%, 50%, 75%, and 90%, provided that they comply with binding provisions. At this stage, the right to defer tax payment, by taking into account the social status, solvency, and other characteristics of the person, also belongs to the local municipalities.

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Property Tax Exemptions

There is also a situation like being completely exempt from the property tax. People in these situations do not pay any taxes. Exemption from property tax can be listed as follows:

• Immovables used for the needs of the foreign consulate and embassy buildings,
• Immovables belonging to religious organizations not used in commercial activities,
• Local administration immovables financed by local government resources,
• As of 1 January 2007, lands with highways, tunnels, streets, underground rails, railways, bridges, and urban rail systems in public and common areas,
• Engineering structures owned by companies and similar organizations owned by state and local governments providing public services,
• Specially protected natural areas where trade is prohibited by law and structures used for their protection,
• Buildings and lands, except for non-commercial buildings and residences, which are protected by the state,
• The buildings and lands used by the army, police units, penal institution, fire brigade, and border guards to fulfill their duties,
• Land and structures within state-funded institutions,
• Buildings and land used in health, education, and social care services,
• Sports centers and the lands within them,
• Land and engineering structures used for agricultural purposes,
• Buildings and cemeteries used for funerals,
• Non-rented or non-transferred properties that state and local governments have the right to use,
• Immovables belonging to associations and foundations determined by the Council of Ministers,
• Structures used for environmental purposes,
• Buildings and structures used for artistic and cultural activities such as museums, libraries, and theaters are completely exempt from property tax.

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