Tax in the shadow of a new cadastral value.
In order to more objectively determine the value of real estate, several changes are planned in the cadastral valuation methodology, which will inevitably affect the amount of real estate tax. The question – to what extent – is currently still unanswered. Solvita Zvidriņa, Director General of the State Land Service (VZD), sketched such a scene at the meeting of the Subcommittee on Housing Issues of the Saeima’s State Administration and Municipalities. She admitted that basically the new cadastral values should come into force already in 2020, but this will not be possible and they could come into force from 2021. For the reasons mentioned above, amendments will be necessary, because currently the regulations provide that the base of cadastral values in force in 2017 is applicable to the calculations of cadastral values in 2018 and 2019. The general director of the VZD emphasized that a new cadastral valuation methodology is not being developed, but the existing one is being improved and supplemented with innovations that improve the quality of valuation. S. Zvidriņa stated that the cadastral valuation methodology is intended to preserve mass valuation, as this is also the experience of other countries. The cadastral value is the basis for real estate tax calculation. At the same time, in those countries where mass valuation is applied – Denmark, Sweden, France, Spain, Ireland, Lithuania, Estonia, Slovenia – a special cadastral value is also determined, which is used for various purposes – including the calculation of real estate tax. According to S. Zvidriņa, the special value can be determined as a percentage (60%-75%-80%) of the cadastral value. Latvian laws currently provide that cadastral values are calculated by approximating the market value. At the same time, there is an exception for agricultural land, which has a limit on the increase of real estate tax. S. Zvidriņa also hastened to add that the cadastral value is needed not only for calculating real estate tax, but also for calculating state fees, determining land rent in shared ownership and forced lease situations. See the full version of the article here
