"I read on the portal bb.lv about how property tax is applied in Riga. I would like to know more about the circumstances under which the reduced tax rate of 0.2% applies to properties, when 0.4%, and when 0.6%. What does this depend on? And what sanctions are provided in case of non-payment of NNS?"
Comment from the Riga City Council
The procedure for levying property tax (NNS) is defined by the Law "On Property Tax" (Likums “Par nekustamā īpašuma nodokļi”). Based on the powers granted by this law to local governments, the Riga City Council issued Mandatory Regulations "On Property Tax in Riga" (“Par nekustamā īpašuma nodokli Rīgā”), which establish the NNS rates applied in the administrative territory of Riga.
According to the mentioned Regulations, a reduced tax rate applies to residential properties:
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0.2% of the cadastral value if it (the value) does not exceed 57,000 euros;
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0.4% of the portion of the cadastral value that exceeds 57,000 euros but does not exceed 107,000 euros;
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0.6% of the cadastral value if it exceeds 107,000 euros.
The reduced NNS rate (0.2% - 0.6%) applies in cases where the housing is not used for economic activities and as of 00:00 on January 1 of the tax year, at least one person has been declared at the residence, and if the property meets certain criteria allowing for the application of the reduced NNS rate.
If there are no declared persons in the apartment, the basic NNS rate of 1.5% of the cadastral value applies for the entire tax year, regardless of changes in the number of declared persons throughout the tax year.
Either a Fine or an Agreement
In case the tax is not paid on time, a penalty of 0.05% of the unpaid principal amount of the debt is charged for each overdue day.
The regulations stipulate both the obligations of the tax administration to ensure the collection of taxes in the municipal budget within the established deadlines and the procedure for how this should be carried out (including in cases of violation of the established deadlines for NNS payment).
The local government is obliged, within its capabilities, to ensure voluntary tax payments — that is, without resorting to the property of individuals. Resorting to the debtor's property can only occur if the collection of the debt by other means is impossible.
Therefore, in cases where the taxpayer anticipates in advance (before the NNS payment deadline) that, for objective reasons, they cannot pay the NNS on time and in full, the Department of Housing and Environment (Mājokļu un vides departaments) urges them to take the opportunity — to negotiate an extension of the payment deadline. An application with the relevant justification must be submitted to the department no later than 5 working days after the NNS payment deadline.
Additionally, if the NNS payer is experiencing financial difficulties, there is an opportunity to negotiate with the Department for the payment of overdue NNS within a period of up to three years, according to a payment schedule. For this, the taxpayer should also submit a motivated application no later than six months after the announcement of the suspension of the collection of overdue NNS payments.
More detailed information on the procedure for calculating NNS and providing benefits can be obtained by calling the information phone 1201 (free of charge) or +371 67012222 (for calls from abroad).
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