Changes in the calculation of real estate tax

As of 2018, new binding regulations on the calculation of real estate tax entered into force in Rezekne municipality. Future residential houses and apartments in which on 1 January of the relevant taxation year, 00:00 no person has declared his or her place of residence, a significantly higher tax rate – 1.51 TP1T from the cadastral value registered on 1 January of the tax year of the specified object will be applied. For residential houses and apartments where at least one person is declared or the owner, legal possessor or user of this house or apartment is a person declared in the territory of Rezekne District, the applicable tax rate will remain unchanged – it will vary from 0.21 TP1T to 0.61 TP1T of the cadastral value of the object. For example, if your declared residence is in an apartment in the parish centre and you own the parents/grandparents' house you maintain, then in such case you will be charged with a reduced rate of 0.2-0.6 % from the cadastral value of the object, both for the apartment and for the house you maintain, as a real estate taxpayer. In contrast, if your declared residence is in another municipality, such as an apartment in a city and you still own a small garden with a garden house in a territory where no person is declared, then in this case the full real estate tax rate – 1.51 TP1T from the cadastral value of the garden house will be applied to the garden house.
It should be noted that, as a general way of use in the cadastre information system of a real estate, a “one-apartment house” is also established as the main way of use in the State Cadastre Information System, and consequently they enter the category of objects which may be taxed both at a tax of 0.2-0.6 1T of the cadastral value of the object and a tax of 1,51 TP1T of the cadastral value of the object, depending on whether there is any declared or missing in that garden household, or that the house is owned by the person declared in the municipality of Rezekne, or a person whose declared place of residence is in the territory of another local government.
Increased tax rates for residential houses and apartments – 1.5 % of the cadastral value of the object (in place of conventional 0,2-0.6 %) is a coercive measure. During the last year, the number of residents whose declared residence is in the administrative territory of the municipality of Rezekne began to decrease very rapidly. According to the population register data, 27309 persons have declared their place of residence on 1 January 2018. At the same time, at the end of 2017 there were around 5000 homes (including around 1000 garden houses), in which no one had declared his place of residence. By adopting amendments to these binding regulations, one of the objectives of the municipality was to reduce the migration of the population to other territories, as well as to promote property management and improvement of the environment. If, for example, the house is empty and abandoned, the owner will have to consider what to do with his property when paying, paying, or maybe moving to live.
The calculation of real estate tax in the Republic of Latvia is regulated by the Law on Immovable Property Tax. The first paragraph of Section 3 of the Law states that the tax rate or rates from 0.21 TP1T to 3% from cadastral value of immovable property shall be determined by the local government in its binding regulations which it publishes before 1 November of the pre-taxation year. The Rēzekne municipality council has used this law by adopting binding regulations No. 6 “amendments to the binding regulations No. 45 of the municipality of Rēzekne of 16 October 2014 on immovable property tax in Rēzekne municipality”, which were published on 20 October 2017 in the newspaper “Rezekne Ambassador” No. 126 (11673). The explanatory memorandum to these binding regulations states that the purpose of these provisions in the part of the establishment of a real estate tax rate for dwellings is: 1) to reduce the migration of the population to other territories; 2) to promote the management of property and improvement of the environment of the environment; 3) to increase economic activity and income tax revenue in the local government. The text and the explanatory memorandum accompanying them can also be found in the homepage of the municipality of Rezekne, under the heading “binding regulations”, with the full binding provision “on real estate tax in Rezekne municipality”.
These amendments are only part of the planned. In 2018, it is planned to prepare another amendments to these binding regulations in order to be able to apply the increased rate of real estate tax to buildings in 2019, which have removed construction permits which have expired, but the structures have also not been put into service. So 2018 is the time for people to meet these things as well.
Juris Zvīdriņš
Rezekne District Municipalities
Head of the Land Management Service
Photo - Andris Tkačenko, member of the photographer “autumn mosaic”