Industry NGOs are calling for both a return to the airbag and a review of assessment methods. And it is planned to revive the Advisory Council on Cadastral Valuation.
Artūrs Žuromskis, a member of the board of the Latvian Property Valuation Association: “Currently, the cadastral values closest to the current cadastral values are for apartments and groups of premises. Because they are simple enough to calculate and correlate closer to prices and market values. But the dispersion is large enough. which is outside Riga, its dispersion is huge and the correlation is much smaller. Simply put, the cadastral value of a standard-type apartment in Riga is now much closer to the market price than a private holiday home on the Daugava, outside Riga, where its cadastral value lags significantly. “
Property valuation was automated, following a new methodology, which should allow more accurate than before valuation of land and buildings. However, the SLS also acknowledges that there are mistakes and solutions will be sought. For example, determining the values of office buildings that could be revised. It will also check whether large apartments and private houses are overestimated, where the price per square meter differs from the standard area housing.
For mass evaluation, the data for calculations are automatically selected from the Land Register. However, the quality of the data is limp, often not updated. In Latvia, the registration of changes and costs are still the responsibility of the owner. But elsewhere the state does it.
“In the world, such cases are usually dealt with either by allocating a special budget to these evaluators, who collect data specifically for evaluation, and in various other ways – there are external surveys, for example, in the Netherlands they have their own street view, where data can be viewed externally. , or through declarations – the state, or more often local governments, to which the owners submit simplified forms of declarations about changes, “explains Sarmīte Barvika, a researcher at RTU Faculty of Architecture.
The calculated values were submitted to the public for discussion in mid-July, giving only two weeks at the beginning. However, due to great interest and objections, it was extended until the end of August. The SLS indicates that objections are grouped together and conceptual errors will be corrected. In turn, individual problems will not be solved.
In the past, in order to protect farmers, in 2015 an annual limit of ten percent increase in payments for agricultural land was imposed for ten years. Now, it will probably be extended, but uncertainty about the future will remain.
“We can freeze values, but that is not recommended, because once there is, there will come a time when this discrepancy will really be pressing,” Barvik said.
For example, in Estonia, where properties have not been revalued for almost twenty years, cadastral values will now increase on average by as much as seven times.
It was envisaged that the newly calculated cadastral values would come into force only in 2022, but until then the real estate tax system would be arranged so that the rapidly growing values would not ruin a part of the Latvian population.
There are currently intense discussions among politicians about when, in what order and what taxes and their discounts to accept. However, the updated values are still not on the government’s agenda, and it is very likely that this process will be postponed again for several years.
One of the proposals – to freeze the cadastral values for another six years, means that the next time the cadastral values are updated, their growth will be even higher than planned now.