Minister of Justice Jānis Bordāns (JKP) promises to prevent the entry into force of the new cadastral values developed by the Ministry of Justice (TM) and the State Land Service until real estate tax (RET) rates are revised, including abolished RET for primary housing and reduced tax rates for small and medium-sized enterprises. companies, including farmers, said Minister Spokesman Andris Vitenburgs.
Such a reaction of the Minister follows after the Ministry of Justice published the new planned cadastral values of real estate, which will significantly increase for many properties, for example, for newer dwellings in Riga and Pieriga they will increase several times.
RIS payments are attached to the cadastral values, which would mean that without changing the tax rates, the payments of this tax would increase several times, which caused a clearly negative reaction in the society.
The politician claims that the Ministry of Finance “already in July last year raised an alarm” about a possible increase in cadastral values in 2022, but the Ministry of Finance has refused to start work on the reform, “on the pretext that the Ministry of Finance has not published new forecast values”. “Now that they have been published, the Ministry of Finance (MoF) has no more excuses. We expect prompt action,” Bordan said.
Bordāns reiterates that TM has prepared amendments to the Law on the State Cadastre of Real Estate and the Law “On RET”, which provides for the abolition of this tax for primary housing worth up to 100,000 euros. This would mean, for example, that for a primary dwelling with a cadastral value of 80,000 euros, the real estate tax payment would be 0 euros, but for a dwelling with a cadastral value of 120,000 euros, the REN would be calculated from the value of 20,000 euros.
It is proposed to apply a similar principle to the land under the primary dwelling, determining that in these cases one-fifth of the cadastral value is used for tax calculation. For example, if the cadastral value is 10,000 euros, then currently the real estate tax is 150 euros. After the introduction of the TM offer, they will be 30 euros.
According to Bordan, the previous inter-institutional meeting did not support the TM proposal, while the next such meeting will take place tomorrow, July 21.
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