On Monday, February 17, the Saeima, the Tax policy Subcommittee meeting, was viewing the issue of real estate tax.

At the hearing, the head of the Minister of Justice, Aldis Bukšs, briefed on bills drawn up by the Ministry, which provide for the removal of immovable property tax or a substantial reduction in the primary housing of natural persons (the property owned by the person in which it is declared). Bills offer the abolition of NEEN's primary dwellings at a value of up to 100 000 euros, and a significant reduction of NQF primary dwellings with a higher cadastral value. The draft law provides for the introduction of the so-called "special value" for the calculation of the Neen for the purpose of the use of the NTA as from 2022. A. Bukšs states: "We all – citizens and the state – must have access to objective information on the cadastral value of all immovable property, but the application of the NTA and the increase in the tax burden on primary housing of the population is not permissible. The Ministry of Justice therefore considers it necessary to introduce a so-called "non-taxable minimum". It is a political one – the actual impact of the Ministry of Justice on People's lives and the sense of security is priceless. The rebuked are false that these changes would be compensated for at the expense of companies and other legal entities. Moreover, the fiscal impact of this offer on the national/municipal budget is minimal compared to other planned tax reforms. Moreover, the total municipal revenues of the NRA guarantee the abolition of this tax on the primary housing of the population ", the impact of the TM offer is accentuated by A. Bukšs. The Ministry of Justice's offer provides that the NEEN does not have to pay for primary dwellings with cadastral value up to 100 000 euros. If the cadastral value of a dwelling exceeds EUR 100 000, then NÎN would calculate from this value minus 100 000, 5 euros and applying a coefficient of 0.2 to the difference obtained (20% of the resulting margin for tax calculation). A similar offer is also for the land below these dwellings, only in this case the non-taxable minimum would be 10 000 euros. Accordingly, if the land cadastral value is less than 10 000 euros, the payment of the NTA is EUR 0, but if more than 10 000 euros is deducted from it 10 000 and a coefficient of 0.2 is applied to the remainder. The Ministry of Justice calls for the review of the real estate tax conditions earlier this year in two stages: 1) by 1 June 2020 to adopt bills prepared by the Ministry of Justice-"amendments to the Law on immovable property in the country" and "amendments to the law" on immovable In the calculation of the real estate tax for the primary accommodation starting from 1 January 2022. (2) in the second half of 2020, the possible reduction of real estate tax rates to immovable property with other uses. Possible options for extending the bill to tenants are also being examined at this stage. For example, by stipulating that the conditions apply also to rented dwellings where the leases are registered in the land register and the tenant is also declared to be in that dwelling. ADDITIONAL INFORMATION: According to the provisional calculations of the Ministry of Justice, the impact of the reform proposed on the total municipal revenues of the real estate tax in 2022 will be neutral (compared to the actual revenues in 2018 and the current forecasts for the Ministry of Finance for the year 2022). Estimates are based on the entry into force on 1 January 2021 of new cadastral values based on 1 July 2019 in Fixed market data and calculated according to the streamlined methodology. The total income of municipalities in 2022, compared to 2018, will not decrease. In worst case scenario, the total revenue will increase by 14 million. Euro. This increase is due to the fact that cadastral values were last revised in 2012 and that the market prices have come to a number of segments during the past decade, and buildings constructed in the last ten years have not been adequately assessed, and their current cadastral values, from which the NILE is calculated, often account for only 40-50, 5% of their fair value.