Financial Services, Latvia, Real Estate, Taxation

International Internet Magazine. Baltic States news & analytics Tuesday, 17.09.2019, 01:54

IMF demands from Latvia increase of property tax to 1.5% of assessed value

Nina Kolyako, BC, Riga, 03.03.2010.Print version
The International Monetary Fund (IMF) has asked Latvia to increase its property tax from the current 0.1-0.3% to 1.5% of the registered value, according to the Biznes&Baltija newspaper. This means that the tax for a three-room apartment in the suburbs of Riga would be around LVL 200 a year.

The predicted additional revenue from this tax increase would be LVL 115 million a year, writes LETA.

 

As reported, the current tax for one- and two-household homes is 0.1% of the assessed value, if that does not exceed LVL 40,000, with a 0.2% tax applying to property with an assessed value of between LVL 40,000 and LVL 75,000, and a rate of 0.3% applying to property with an assessed value exceeding LVL 75,000.

 

According to the newspaper's source, which has information on the progress of negotiations with the international lenders, Latvia is being insistently recommended to introduce a unitary property tax of around 1.5% from next year, with some possible reductions.

 

Two other possibilities are being discussed – increases to 1% or to 1.3%. In these scenarios, the state would receive an increased income of LVL 111 million or LVL 113 million respectively.

 

The possibility is also being discussed of introducing a progressive rate: 0.5% for property whose worth does not exceed LVL 10,000, one% for a worth of between LVL 10,000 to LVL 20,000, 1.5% where the value is from LVL 20,000 to LVL 40,000, and two% if the value is in excess of LVL 40,000. This solution would allow the state treasury to earn an additional LVL 113 million. A second possible progressive tax structure foresees the levels being set at 0.75%, 1.25%, 1.75%, and 2.25%.






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