Capital Gains Tax in Latvia: Rates and Rules for 2026

Since January 1, 2025, Latvia taxes capital gains at a flat 25.5%. The 20% rate you still see quoted on many websites — including some professional ones — expired on December 31, 2024. If you sell shares, real estate, cryptocurrency, intellectual property, or a business in 2026, budget 25.5% of the gain, not 20%.

There is one narrow exception: transactions started before December 31, 2024 but not completed by that date keep the old 20% rate through 2025–2027 — and only if VID was notified in advance. For everything else, 25.5% applies.

The mechanics matter as much as the rate: a quarterly declaration once gains exceed EUR 1,000, exemptions that can bring a home-sale tax to zero, and a corporate participation exemption that makes some share sales entirely tax-free. Here is the complete picture.

Quick Summary

Latvia taxes capital gains of individuals at a flat 25.5% since January 1, 2025 (the previous 20% rate is outdated; it survives only for transactions started before 2025 and notified to VID). Taxable capital assets include shares, bonds, fund units, real estate, cryptocurrency, intellectual property, and a business sold as a going concern. The gain is the sale price minus documented acquisition and improvement costs. Residents declare via form DK in EDS: by the 15th of the month after the quarter if quarterly gains exceed EUR 1,000, otherwise by January 15 of the following year; tax is paid by the 23rd of the declaration month. Primary residence sales can be fully exempt.

What Counts as a Capital Asset

The Personal Income Tax law defines a closed list of capital assets, and the 25.5% rate applies to gains from selling any of them:

Shares, stocks, and other equity instruments (listed or private)
Investment fund units and debt instruments (bonds, debentures)
Real estate — land, apartments, houses, including inherited property
Cryptocurrency and other virtual assets
Intellectual property — patents, trademarks, copyrights you sell outright
A business sold as a going concern (the enterprise as a whole, not just its shares)

Note that dividends are capital income but not capital gains — dividends from a Latvian SIA that has paid CIT carry no additional PIT, as we explain in our dividend tax guide. Royalties from licensing IP are likewise taxed differently from a one-time sale of the IP itself.

Crypto deserves special attention: every disposal is taxable, including coin-to-coin swaps and paying for goods in crypto. Since 2026, exchanges report user data to VID under DAC8, so undeclared gains are visible to the tax authority — our crypto tax article covers the details.

How the Gain Is Calculated

The taxable gain is the sale price minus the acquisition cost minus documented improvement costs. The formula is simple; the documentation is where taxpayers lose money.

Acquisition cost includes the purchase price plus directly attributable expenses: state duty, notary fees, brokerage commissions, exchange fees. For real estate, documented investments in the property — renovation, extension, engineering systems — increase the cost basis and reduce the gain. For inherited property, the basis is generally the value recorded in the inheritance certificate.

An example. You bought an apartment in Riga in 2021 for EUR 90,000, spent EUR 15,000 on a documented renovation, paid EUR 1,200 in purchase-related duties, and sell it in 2026 for EUR 150,000:

Sale price: EUR 150,000
Cost basis: EUR 90,000 + 15,000 + 1,200 = EUR 106,200
Taxable gain: EUR 43,800
Tax at 25.5%: EUR 11,169

Without the renovation invoices, the tax would be EUR 3,825 higher. Keep every invoice and bank payment confirmation — VID routinely rejects undocumented costs during audits.

Selling Property: When You Pay Nothing

Latvia exempts a primary residence sale from capital gains tax if specific ownership and registration conditions are met. There are three separate routes to a full exemption:

Primary residence rule. You owned the property for at least 60 months, and it was your declared place of residence for at least 12 consecutive months within the last 60 months before the sale contract.
Sole property rule. You owned the property for at least 60 months, and during those 60 months it was your only real estate.
Reinvestment rule. The property is your only real estate, and you reinvest the proceeds into a functionally similar property (housing for housing) within 12 months after the sale — or you already bought the replacement before selling.

The details are strict. "Declared residence" means the official declaration in the Population Register, not simply living there — if you never declared your address at the property, route 1 is closed. Under the reinvestment rule, only the reinvested portion escapes tax: sell for EUR 150,000, buy for EUR 120,000, and the gain attributable to the remaining EUR 30,000 stays taxable.

If none of the exemptions applies — investment apartments, land plots, a second property — the full 25.5% applies to the gain.

Declaring and Paying: Thresholds and Deadlines

Residents declare capital gains on form DK in VID's electronic declaration system (EDS), and the deadline depends on the size of the quarterly gain:

Total gains from capital asset transactions exceed EUR 1,000 in a quarter — file by the 15th of the month following that quarter (April 15, July 15, October 15, January 15).
Total gains are EUR 1,000 or less per quarter — one declaration for the whole year by January 15 of the following year.

The calculated tax must be paid into the unified tax account by the 23rd of the month in which the declaration was filed. File your Q3 declaration on October 10, and the tax is due by October 23.

Asset type	Rate 2026	Declaration deadline	Exemptions
Shares, bonds, fund units	25.5%	Quarterly DK if gains > EUR 1,000/quarter; otherwise Jan 15	None for individuals
Real estate	25.5%	Same DK deadlines	Primary residence (60 months + 12 months declared), sole property, reinvestment within 12 months
Cryptocurrency	25.5%	Same DK deadlines	None; every swap is taxable
IP (sold outright)	25.5%	Same DK deadlines	None
Business as going concern	25.5%	Same DK deadlines	None
Subsidiary shares sold by a Latvian SIA	0% CIT	Via CIT return	Participation exemption: 10%+ held for 3+ years

Note that the DK declaration is separate from the annual income declaration due by June 1 — filing one does not replace the other.

Losses: Limited Offsetting

Capital losses can only offset capital gains — and only within the same tax year. If you sold Tesla shares at a EUR 8,000 profit and closed a losing crypto position at EUR 5,000, your taxable gain is EUR 3,000. What you cannot do: carry the loss forward to next year, or set it against salary, rental, or dividend income. If a quarterly declaration already taxed a gain and a later loss in the same year reduces your annual result, an annual recalculation recovers the overpaid tax.

Non-Residents and Companies

Non-residents pay Latvian tax when they sell Latvian real estate — and often the buyer withholds it. If a non-resident sells Latvian property to a Latvian company or a registered economic operator, the buyer withholds 3% of the gross sale price at source. The non-resident can accept that as final or file a declaration, calculate the actual gain at 25.5%, and reclaim the difference — worthwhile when the profit margin is thin. When the buyer is a private individual, no withholding occurs and the non-resident must declare the gain to VID directly. Our non-resident tax overview covers the broader picture.

For companies, the logic is entirely different. A Latvian SIA pays no CIT until profit is distributed, and gains on subsidiary shares can be permanently exempt under the participation exemption — at least 10% ownership held for at least 3 years. A holding SIA selling a stake bought for EUR 200,000 at EUR 500,000 pays zero tax on the EUR 300,000 gain. This is one of the strongest arguments for holding investments through a company rather than personally — see our Latvian holding company guide.

FAQ

Is the capital gains tax in Latvia 20% or 25.5%?

It is 25.5% — and has been since January 1, 2025. The 20% rate applied through the end of 2024, and much online content has simply not been updated. The only situation where 20% still applies in 2026 is transitional: the transaction was started before December 31, 2024, was not completed by then, and VID was notified. For any sale of shares, property, crypto, or a business initiated in 2025 or 2026, calculate with 25.5%.

Do I pay tax when I sell my apartment in Latvia?

Not if you qualify for an exemption. The sale is tax-free if you owned the apartment for at least 60 months and were declared there for at least 12 consecutive months within the last 60 months, or if it was your only real estate for 60 months, or if it is your only property and you reinvest the proceeds in comparable housing within 12 months. Otherwise the gain — sale price minus documented purchase and renovation costs — is taxed at 25.5%.

When do I have to file the capital gains declaration?

If your total capital gains exceed EUR 1,000 in a quarter, file form DK in EDS by the 15th of the month following that quarter — April 15, July 15, October 15, and January 15. If quarterly gains stay at EUR 1,000 or below, one annual DK by January 15 of the following year is enough. The tax itself is due in the unified tax account by the 23rd of the month in which you filed. Late filing triggers penalties and late-payment interest.

Can I deduct losses from my capital gains?

Only partially. Losses from capital asset transactions offset gains from other capital asset transactions in the same tax year — a losing stock position can shelter a crypto profit, for example. Losses cannot be carried forward to future years and cannot reduce salary, rental, or dividend income. If quarterly declarations during the year taxed gains that a later loss wiped out, you can recalculate the year and recover the overpayment through an adjustment declaration.

How are non-residents taxed when selling Latvian property?

When the buyer is a Latvian company or registered economic operator, it withholds 3% of the gross purchase price and pays it to VID. The non-resident seller may leave it at that or declare the actual gain, apply 25.5%, and reclaim any overwithheld amount — useful when the real profit is small. Double tax treaties generally leave Latvia the right to tax gains on Latvian real estate, so the tax is usually credited, not avoided, in the home country.

Get the Numbers Right Before You Sign

A sale agreement signed on the wrong date, a missing renovation invoice, or an overlooked exemption can change the tax bill by thousands of euros. CORVUS ACCOUNTING & TAX models the capital gains outcome before the transaction and handles the DK declarations after it.

Get a capital gains review →