The JKP explained such a step by “the inability of the coalition parties to agree on a comprehensive review of the real estate tax system, which would ensure a fair and tolerable tax burden on Latvian residents and entrepreneurs, as well as other real estate-related payments”.
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The essence of the draft law submitted to the JKP is to continue to apply the currently valid cadastral values at least until the beginning of 2026. In order to ensure the reduction of the importance of cadastral values in the calculation of real estate tax (RET) and to achieve the revision of the real estate tax system, the draft law provides for the Cabinet to submit to the Saeima by 31 July 2021 draft laws the amount of tax on compulsory shared property, as well as commercial areas and agricultural land. It would be planned to instruct the Cabinet of Ministers to submit the necessary draft laws that ensure the reassessment of the amount of state fees related to the cadastral value.
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The Ministry of Justice has drafted its proposal to exempt most homes from PIT. The proposal would allow about 95% of Latvian residents – individuals – not to pay the tax. However, JKP emphasized that the Ministries of Finance and Economy have not developed a sustainable solution for the application of R & D & I to companies this year.
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It has already been reported that discussions are currently taking place at the political level on how to deal with the increase in REN after the introduction of possible new cadastral values.
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The Minister of Justice Jānis Bordāns (JKP) has previously stated that he is determined not to forward the new cadastral values developed by the State Land Service to the government if the government does not support the offer of the Ministry of Justice (TM) regarding RIS relief.
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Then, in an interview on TV3’s “900 Seconds” program, Bordāns pointed out that TM would encourage to name any dwelling where the population is declared as the primary home, and to apply the non-taxable minimum of 100,000 euros not to it, but to the declared persons. He explained that this would also apply to rented apartments, solve the issues of merchants and developers.
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Prime Minister Krišjānis Kariņš (JV) has stated that in order not to increase the expenditures of the population due to changes in cadastral values, REN rates should be reduced. At the same time, according to him, REN rates will be reviewed before the new cadastral values come into force.
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