How a Latvian tax resident declares rent and sale proceeds from property abroad, how foreign tax is deducted, which forms and dates apply, and what to prepare.
A Latvian tax resident who owns a flat in Montenegro, Turkey or Georgia is taxed in Latvia on income from abroad as well as at home. The State Revenue Service (VID) expects you to report foreign rent and the gain from selling the property, and it gives a deduction for tax already paid in the other country. This guide covers the logic, the forms and the dates. It is informational. We read VID guidance dated 2024 to 2026; a few points could not be confirmed and are marked so.
Which rule applies to you: resident or non-resident
A Latvian tax resident pays personal income tax on income earned in Latvia and abroad. A non-resident pays in Latvia only on income from Latvian sources, for example on selling property located in Latvia. Your status is set by Latvian residence rules (declared residence, permanent home, days spent); VID has a page for determining it. If you recently moved, see our note on tax residency when relocating. The rest of this article assumes you are a Latvian tax resident.
One exemption you may have heard of does not help here. Employment income earned in another EU or EEA state can be exempt in Latvia, but that rule is for employment. Rent and gains from property are capital income and are not covered.
Rent from the foreign property
Foreign rent is declared in the annual income declaration, in annex D2, which VID describes as the annex for income of a resident earned abroad, with a separate line for each country and type of income. VID publishes the declaration period from 1 March of the following year. We could not confirm from VID's own text the last date for a mandatory filing, so check the current deadline in the declaration system (EDS) or with VID.
What rate applies to the rent? We could not confirm this for rent from property abroad. VID guidance for landlords in Latvia describes a special 10% regime for rented residential property; whether it can be used for foreign property is something to ask VID. Otherwise general rates apply. Do not assume a figure from a Latvian landlord's example.
The foreign tax is credited: when you complete the declaration, the calculated Latvian tax is reduced by the tax paid abroad, if a document confirmed by the foreign tax authority shows the income and the tax paid. The reduction cannot exceed the Latvian tax calculated on that income. Amounts in a foreign currency are converted at the European Central Bank rate on the day the income is calculated.
Selling the property
VID guidance on selling real estate applies a 25.5% rate to the gain. The gain is the sale price minus the purchase value and the investments made while you held the property; purchase costs such as state fees, commission and loan interest tied to the purchase can be included if documented. A sale at a loss produces no tax.
The exemption in Latvian law for property held more than 60 months, where you were also declared as living there for at least 12 months, is written around declared residence. A flat abroad rarely meets that, and we could not confirm that the exemption can be used for property abroad, so ask VID before you rely on it.
The return for capital gains (declaration DK) is filed through the declaration system. If the gain in a quarter is above EUR 1,000, VID's table says to file by the 15th of the month after the quarter and to pay by the 23rd; if it is EUR 1,000 or less, by 15 January of the next year, with payment by 23 January. The DK form has a column for tax paid abroad. A year-end adjustment declaration (GD) is filed by 1 February for 2025 gains.
Foreign tax and the treaty
The deduction above works with or without a treaty. Treaties between Latvia and the property country can change who may tax the income and the method of relief. VID warns that its automatic calculation in the declaration system may be wrong where treaties differ, and asks you to attach documents from the foreign tax authority. Treaty details are on the VID site and we have not checked them country by country.
One more point. A resident who receives more than EUR 200,000 in a year from Latvia and abroad together, or from abroad alone, must file an annual declaration and pay an additional 3% personal income tax, which can also be reduced by foreign tax paid. This is rarely relevant to a single flat, but it matters for larger portfolios.
Reporting the asset itself
We found no separate Latvian duty to report foreign real estate or a foreign account as an asset, apart from the declaration of income and gains above. We could not rule out that one exists, so ask VID or your adviser. Foreign banks and tax authorities exchange account data under international rules, so keep your declarations consistent with your accounts.
What a Russian-speaking resident should prepare
- The purchase deed, the list of purchase costs and the loan interest records, with certified translations when the originals are not in Latvian or English.
- Lease or platform statements for each year, and the foreign tax assessment, return or withholding certificate, confirmed by the foreign tax authority.
- Bank statements showing the rent, in the same name and the same Latin spelling as in the Latvian records.
- A log of exchange rates used.
- Access to EDS. VID publishes guidance in English as well as Latvian; the declaration forms are in Latvian.
FAQ
Do I have to file if I only rent out the flat abroad? Foreign income of a resident is declared in the annual declaration, annex D2. VID's wording about when filing is mandatory applies mostly to employment income from other EU states, which is not your case.
Can I deduct the tax I paid in the property country? Yes, up to the Latvian tax on that income, and with a document confirmed by the foreign tax authority.
What rate applies to the sale of a flat abroad? VID guidance on selling real estate gives 25.5% on the gain. Check whether an exemption can apply.
What if I sold at a loss? The VID guidance says no taxable income arises from a sale at a loss, and no DK return is needed.
Is the EU income exemption enough? No, that exemption covers employment income, not rent or property gains.
How we help
D.H. Realting is a trilingual platform (Russian, English, Polish) that finds properties abroad and coordinates independent local lawyers and tax advisers, including advisers who work with Latvian residents. See the total cost of ownership checklist and our calculators before you buy. Official sources: VID, Latvian residents abroad and the VID website. This text is informational and is not legal, tax or investment advice; verify current rules with VID or an adviser.