New cadastral value calculation order may be put off for a year in Latvia
On Thursday, 5 May, the Saeima supported the draft that will put off the introduction of a new cadastral value calculation for real estate properties order for one year. With that, the current cadastral value calculation order will remain in force in 2017.
According to the current regulation, cadastral value is to be calculated in compliance with real estate market prices at 85% on average. The Cabinet of Ministers has to establish the base of cadastral value by 15 June. As noted by authors of the draft, establishing cadastral value for housing in accordance to the market situation could result in an unbalanced real estate tax increase. For example, the value increase in new real estate projects is expected to be two times higher. It is necessary to search for solutions to limit the real estate tax rise, as reported by Saeima press-service.
The draft provides that the new cadastral value calculation will be applied starting from 1 January 2018. The base of the cadastral value for 2018-2019 will be calculated in accordance with the real estate market that was recorded on 1 July 2015. In addition, the government has ordered ministries and social partners to prepare amendments to the Real Estate Tax Law before 2016 to ensure balanced growth of the tax burden.