Regional Formation and Development Studies

The research aim is to analyse the peculiarities for application of immovable property tax in Latvia and to assess the main factors affecting the amount of immovable property tax and contradicting the basic principles for imposing taxes. It is essential to review the methods how the State Land Service determines cadastral values for real estate, since the cadastral value is the base for calculation of immovable property tax. The revision is required as the establishment of a fair tax system is impossible without adequate and comparable cadastral values. In the future, land shall be valued pursuant to lease and not to expropriation transactions in Latvia, while the cadastral valuation of buildings might be done consistent with the method of expenses by determining construction expenses of buildings. The issue on mass inspection of physical condition of buildings and data updating shall be solved in Latvia. In addition, an issue on possibilities to apply the most fair procedure for tax calculation shall be solved on the governmental level, i.e. to calculate taxes consistent with procedure for the use of immovable property registered in the Land Register as well as to cancel the limitation for increase of immovable property tax stated by the municipality and to regulate the tax burden through tax rates.