Immovable property duty is among the federal levies whose regime is constantly changing. The process for calculating taxes, the tax burden, and the tax levels has evolved significantly over time. The common policy changes of fixed real estate taxes have aided in the creation of a new, steady, and reliable technique for the implementation of the tax in Latvia in the long term. This tax is the sole tax whose profits expanded between 2009 and 2011, and the most tax money is gathered in Riga City.

Application of tax 

Local authorities rely heavily on such taxes to fund their budgets. In contrast to other levies, a city authority determines real estate taxes for land situated within its jurisdiction. According to the legislation, the State undertakes the monitoring feature for the implementation of the tax, notably. It verifies the adherence of the local administration’s estimate, retrieval, and bookkeeping with the norms of the legislative decree. 

Municipal authorities play the most important role in the management of levies because they guarantee basic revenue overseeing methods.

Legislation 

The Legislation on Immovable Property Tax was passed in 1997, highlighting the fundamental ethics of levying taxes, taxpayer objects, tax exemptions, appraisal, and details to be used, among other things. For the first time, current value bulk assessment findings were used to calculate urban area taxes in 2000. 

In Latvia, there are no cohesive real estate tax authoritative concepts. Local authorities handle estate tax liabilities based on their official role, financial demands, and what the law permits them to do.

Authorities in Charge 

The Treasury Department, the Judiciary, the State Property Service, and city municipalities are the four main companions responsible for the execution of LIPT in Latvia.

Given the significant impact of the area’s values on residential development, collaboration with the Environmental Ministry and Regional Planning is also necessary. Tax income has been steadily increasing over the years.

Taxable individuals and things 

The IPT will be levied on tangible properties such as residences and infrastructures. The IPT is paid by natural and legitimate entities, such as non-residents, landlords, or those with ownership rights. Individuals who use government or metropolitan titles are also taxed.

The levy becomes attributable the following month after the onset of the acquisition of fixed assets. The calendar year must therefore be the revenue phase for land tax. The tax is determined using the current worth of the immovable property. Local authorities must send citizens a payment claim showing the amount of IPT unpaid for the existing tax year by February 15. Tax is payable once every qtr or once a year. Each citizen in each state govt must pay at least seven euros of IPT.

Exemptions

The following are exempt from RET: 

• The commercial estate is utilized by municipal authorities;
• The office is used for the requirements of international consular or diplomatic workplaces; 
• National defense services and correctional facilities buildings;
• Police, fire, and emergency buildings;
• Foreign state-owned real estate;
• Cultural landmarks;
• Public places, roadways, and railroad lines;
• Land that is overgrown with young forest stands;
• Buildings that are not utilized for commercial purposes;
• National athletic amenities;
• Structures for farm production;
• Structures for education, health, and social care; 
• Cemeteries and land owned by religious organizations; and
• Land under carefully protected natural areas.

Tax Rates 

Land and structure excise duties are levied individually and at varying rates. In Latvia, the present rate range from 0.2 percent to 3 percent, based on the land registry worth of the real property as determined by SLS. 

The LIPT assigned municipal authorities to focus on the conditional guidelines made by each township to:

• Levy a tariff on housing auxiliary structures;
• Set taxation system in their territory according to revenue rates; and 
• Provide relaxation for socially oppressed people’s residential lands.

Table 1 displays the levels for the years 1998 to 2018.

Year	Rate	Description
Up to 2007	1.5%	In the case of a corporate building.
Up to 2008	1.5%	For estate.
2008	1%	For estate.
2010	1.5%	For areas and structures utilized for commercial reasons.
2011	1.5%	For structures according to their current market value.
2012	0.1%-0.3%	For residential areas according to their market value.
2014	3%	Based on the land registry worth of farmland and ruined areas.