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Sunday 19.05.2013 | Name days: Sibilla, Teika, Lita
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State Audit uncovers violations in Real Estate Tax administration in Riga

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Riga’s municipality does not provide sufficient administration of real estate tax for all city objects, because not all objects the owners of which are to pay the tax have been identified, State Audit reports.

For example, the municipality has not decided whether the tax should be paid for 332 objects, construction permits for which were issued in 2005 and the the expiration data fro which ran out on October 1, 2012. On top of that, territories surrounding Riga Free port were not taxed in 2011 and 2012 for a total of 96 007 LVL, according to State Audit.

The State Audit employed a random factor when evaluating the administration of real estate tax. It was revealed during the audit that in 44% cases when the notification in regard to Real Estate Tax was not sent to the owner of the real estate property, the municipality was supposed to do it. 72% of notifications about Real Estate Tax were sent with violation of the term stated in the law. It was also revealed that 33% of inspected cases had wrongly calculated tax rates – instead of a 1.5% there was a reduced rate of 0.2-0.6%. In some cases buildings that are not supposed to pay the tax were presented with charges.

In spite of the fact that information about tax benefits is available in state registries, the municipality did not use the opportunity to offer these benefits in 31% of cases. The State Audit notes that it is not always possible to calculate the Real Estate Tax accurately, because amendments to the Real Estate Tax Law in regard to tax rates were adopted in the last months of the year and became in force on January 1 of the next year. With that, the administration was obligated to add changes in short terms.

The audit was carried out in the period between January 1, 2011 to October 30, 2012. After the conclusion of the revision there were proposals offered on how work can be improved to have the tax be calculated equally for all real estate objects. This would reduce the tax burden on taxpayers and improve debt administration procedures.

Ref: 102.109.109.6364


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  1. J. says:

    It’s an unconstitutional, criminal tax.
    Many can barely pay interest on loans and heating costs. For some, the real estate tax is the straw that breaks the camel’s back – they are forced to sell their own home because the government taxes them too heavily.

    Thumb up 0 Thumb down 0

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