Overview: Why Taxes Matter for Short‑Term Rentals
Short‑term rentals via platforms like Airbnb and Booking.com keep expanding in Latvia. To operate legally and protect your returns, hosts must understand the taxes that apply to accommodation services.
This ramix.lv guide gives a clear, actionable summary for both new and experienced hosts.
1. Personal Income Tax (PIT) – 10% of Gross Revenue
The most popular regime for individuals renting short‑term is the simplified 10% PIT on gross rental income.
Why the 10% regime is attractive
- Straightforward – no expense accounting
- Minimal bookkeeping complexity
- Tax paid only on cash actually received
Example: Monthly gross €1,800 → PIT = €180.
Ideal for owners with one or a few apartments who want compliant, low‑maintenance taxation.
2. VAT on Accommodation – 12%
Short‑term rental activity is treated as an accommodation service; the reduced VAT rate of 12% applies.
When does VAT become due?
You must handle VAT if:
- You are already VAT‑registered or
- Your annual taxable turnover reaches the ~€40,000 registration threshold
If you are not registered and remain below the threshold, VAT is not charged. Note: For a company (SIA) leasing multiple units VAT considerations often arise sooner.
3. Riga Tourism Levy – €1 per Guest per Night (First 10 Nights)
Riga currently is the only Latvian city applying a tourism levy; it covers short‑term rentals including Airbnb and Booking stays.
How the levy works
- €1 per guest per night
- Only the first 10 nights of a single reservation
- Applies solely within Riga municipality boundaries
Examples:
- 2 guests × 3 nights → €6
- 1 guest × 14 nights → €10
- 4 guests × 2 nights → €8
The host typically collects and remits the levy to Riga municipality.
4. Real Estate Tax (RET)
RET varies by property classification and usage. Some municipalities apply higher rates if the property is used for economic (commercial) activity.
Indicative ranges:
- Residential use: 0.2–0.6%
- Commercial usage: up to 1.5%
Confirm classification with the local municipality for accurate planning.
5. Should You Register Economic Activity?
If your rental is continuous and profit‑oriented, the tax authority (VID) considers it economic activity.
Advantages of formal registration:
- Eligibility for the 10% PIT regime
- Officially providing an accommodation service
- Simpler structured record‑keeping
- Smoother cooperation with a management partner (e.g. ramix.lv)
Summary: Latvia Short‑Term Rental Taxes
Key items hosts must track:
- PIT – 10% of gross receipts
- VAT – 12% if registered or threshold exceeded
- Riga tourism levy – €1 per person per night (max 10 nights)
- RET – depends on property, municipality and usage
Proper tax structuring reduces risk and stabilizes long‑term income.
Why Partner with ramix.lv?
- Revenue optimisation
- Compliance and tax clarity
- Automated operational workflows
- Guest handling, cleaning and daily logistics
If you want support for your property – get in touch.