Residence Declaration: The Key to Reduced Rates

The Latvian tax landscape is set for a major transformation in 2026, with significant reforms aimed at modernizing the economy and ensuring a fairer distribution of the tax burden. One of the most impactful changes for property owners involves the Real Estate Tax (NĪN), which will be restructured to better reflect market realities while encouraging the efficient use of land. Understanding how to navigate these changes is essential for minimizing your tax expenses.

The most direct way to optimize your property tax is through residence declaration. In Riga and other municipalities, a significantly lower tax rate of 0.2% to 0.6% of the cadastral value is applied to residential properties—but only if certain conditions are met.

Key Points About Declaration

**The Critical Deadline**: To qualify for the reduced rate, at least one person must be declared in the property by January 1, 2026, at 00:00.

**The "Empty Property" Penalty**: If no one is declared at the property by this deadline, a base rate of 1.5% will be applied for the entire year, regardless of any changes later.

**The 30 m² Rule**: For buildings not divided into individual apartment properties, the reduced rate is tied to the number of declared persons, with 30 m² of floor space allocated per person.

**Commercial and Legal Entities**: For legal entities to receive the reduced rate on rented residential property, rental rights must be registered in the Land Register.

Mandatory E-Communication for Discounts

Starting in 2026, many taxpayers must register an official electronic communication channel (e-address or e-mail) by January 1st to remain eligible for tax discounts. Unlike previous years, there will be no transition period or extension for this requirement in 2026.

Key exemptions and benefits:

Families with children: Automatic benefits until age 19. For full-time students aged 19-24, application and proof of study must be submitted by December 15th.

Social groups: Pensioners, persons with disabilities, and low-income households may qualify for significant discounts or exemptions.

Challenging Cadastral Values and Municipal Autonomy

The 2026 reform includes a review of cadastral values to bring them closer to real market prices. However, property owners retain the right to contest these values if they believe the state's assessment significantly exceeds the actual market value.

Local municipalities have been granted greater autonomy to set specific rates:

Commercial properties are generally taxed at higher rates ranging from 1.0% to 1.5%.

Unbuilt land in urban areas may face rates as high as 3.0% to prevent speculation.

Proactive Steps for Property Owners

1. Verify Declarations: Use the Latvija.gov.lv portal to confirm who is declared in your property.

2. Activate Your E-Address: Do this before January 1st to safeguard your eligibility for discounts.

3. Audit Your Property Value: If your cadastral value seems disproportionate, a professional appraisal can provide the evidence needed for a challenge.

Analogy for Understanding: Managing your property tax is like servicing a car before a long journey. If you don't check the "fluids" (residence declaration) and "electrical systems" (e-address registration) before the January 1st start date, you risk a "breakdown" in the form of much higher tax bills that last the entire year.

If you require a professional property assessment or need guidance before the 2026 reforms take hold, the experts at ERI Mājas are here to help.

Contact us for a consultation:

Phone: +371 20098880

Email: info@eri.lv

Website: www.eri.lv

Keywords:

real estate taxproperty tax 2026tax discountscadastral valueresidence declaration

Real Estate Tax 2026: How to Optimize