Real Estate Tax

Real estate tax is payable annually on:

  • Business properties, such as land and buildings used for economic activities, as well as engineering structures, such as motorways, streets, roads, parking places, bridges, elevated highways, tunnels, pipelines, communication lines, and power lines.
  • Buildings that form part of a private dwelling house development (also if owned by a company but not used for living purposes).

Municipalities may determine a rate between 0.2% and 3%. A rate above 1.5% may be applied to buildings that are not maintained according to maintenance requirements.

If a municipality does not announce rates by 1 November before the tax period, then statutory rates will apply.

Statutory RET rates are as follows:

  • The standard rate of 1.5% on the cadastral value of land, buildings, and engineering structures.
  • A progressive rate on dwelling houses, their parts, and any parts of a non-residential building that are functionally used for living and not used in trade or business:
    • 0.2% of cadastral values up to EUR 56,915.
    • 0.4% of cadastral values between EUR 56,915 and EUR 106,715.
    • 0.6% of cadastral values exceeding EUR 106,715.
  • Up to 3% on uncultivated land capable of agricultural use, unless it is up to one hectare in area or subject to statutory restrictions on agricultural activity. By law, uncultivated land capable of agricultural use is agricultural land that is not used for making or growing agricultural products (including harvesting, grazing, and keeping animals for agricultural purposes) or is not kept in a good agricultural and environmental condition. Municipalities may also determine an extra rate of 1.5% on uncultivated land, and so the total rate on such land may reach 4.5%.

A 3% RET applies on buildings under construction if the permitted construction period has expired. The tax is applicable until the building is accepted for use. The rate will be charged on the cadastral value of the related land or on the cadastral value of the building, whichever is higher.

Residential property owned by companies is eligible for reduced rates (0.2% to 0.6%), but only where such property is rented out and tenancy rights properly entered on the Land Register of Latvia.