Reizniece-Ozola: Local authorities should apply property tax responsibly

RIGA - Local authorities have to treat their residents responsibly as they collect property tax from them, Finance Minister Dana Reizniece-Ozola (Greens/Farmers) said in an interview with LNT commercial TV channel this morning.

The minister indicated that the ministry’s workgroup currently supports a proposal calling for a two-year freeze on properties’ cadastral value, the rise of which has been pushing up the property tax. The Justice Ministry, meanwhile, has been ordered to fix the system. Reizniece-Ozola noted that properties’ cadastral values can be very different, which results in excessively high taxes on some properties.

Reizniece-Ozola said that it is up to local authorities to set the size of the property tax and that they also have the authority to grant tax allowances. The local authorities, therefore, should become more responsible and grant tax allowances to those residents who are unable to meet the high tax payments.

The minister also informed that last year, for instance, local authorities collected additional EUR 35 million in property taxes, including EUR 26 million in Riga alone. Municipal leaders, therefore, should change their aggressive property tax charging policies in attempts to increase revenues in the municipal budgets.

As reported, the government coalition has agreed to freeze properties’ cadastral value for one to two years while the government is working on a new regulation for the taxation of real estate.