Guide to Property Taxes in Latvia

Nonresidents are taxed on their Latvian-sourced income. Married couples are taxed separately.

Nonresidents are often taxed by withholding and are only eligible for allowances and credits available to residents if they are residents of EEA countries and are earning at least 75% of their income from Latvian sources.

Income Tax

Latvia applies a progressive personal income tax system. Unless a different (special) rate is set by law, income is taxed progressively, with a 25.5% rate applied to annual income up to EUR 105,300, while any income exceeding EUR 105,300 is taxed at 33%.

Rental Income

Rental income earned by nonresident property owners is taxed at the standard progressive income tax rate of 25.5% - 33%, in which case property taxes and depreciation expenses are deductible. The taxpayer also has an alternative to pay a flat 10% income tax on their rental property income; however, in this case, no deductions are allowed, and the property owner cannot benefit from the capital gains deductions when selling the property.

Corporate Rental Income

Corporate entities earning rental income in Latvia are subject to a corporate income tax rate of 20%. Rental income is taxed similarly to other types of corporate income, with allowable deductions for expenses directly related to earning the rental income.

Capital Gains

Capital gains from the sale of real estate property are taxed at a special rate of 20%. Taxable capital gains are computed as the selling price less acquisition costs and other related expenses.

Property Buying and Selling Taxes/Costs in Latvia

Property Holding Tax

Real Estate Tax

Real estate tax is levied in Latvia at a rate of 0.2-3% for properties. The tax is levied on the cadastral value of the property, as calculated by local authorities, 0.2-0.6% on residential properties, and 1.5-3% on land.

Real estate tax paid is also deductible for income tax purposes if the real estate property is used for business or commercial purposes.