“It would be very pleasant for the public (..) if this source or taxable object were land, so that a person would not feel that he was building a house for himself, buying an apartment and then buying back from the municipality every year,” said the head of Latio.
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He also emphasized that there are a lot of unused territories in Latvia.
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“If this charge for infrastructure and services could be applied to land, I think a large part of society would consider it fairer,” said Shin.
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It has already been reported that the Ministry of Justice on Wednesday, July 29, sent to the Ministry of Finance, as well as other institutions involved in the coordination, the updated proposals for the real estate tax reform. The Ministry of Justice calls for the introduction of a non-taxable minimum of 100,000 euros per declared person, as well as a reduction of the tax on residential land five times – from 1.5% to 0.3%.
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The revised proposals provide for a non-taxable minimum of EUR 100 000 per person declared, with a reduction coefficient of 0.2 to be applied to the residual value, if any. For example, if the cadastral value of the dwelling is 80,000 euros and one person has declared it, the housing tax should not be paid. If, for example, the value of the dwelling is 300,000 euros and two persons have declared it, then the tax would be calculated from 20,000 euros. This reduction coefficient would only apply to housing with a value of up to € 500,000.
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According to the calculations of the Ministry of Justice, implementing these changes, the total revenue of local governments from the real estate tax in 2022 would be at least 232 million euros, while in 2018 local governments actually collected 207 million euros.
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In mid-July, the State Land Service submitted for public discussion the cadastral values designed for 2022, which have been recalculated in accordance with the value of real estate in the market in accordance with the task given by the government.
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In order for these cadastral values to come into force in 2022, they must be approved by the Cabinet of Ministers. The Minister of Justice has previously stated that he will not submit these projects to the government for approval until there are guarantees that a tax-free minimum for primary housing and reduced tax rates for businesses will be introduced.
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