Real estate tax in Lithuania
The law which determines the rules of payment of this tax is the Law on Real Estate Tax of the Republic of Lithuania (hereinafter – the Law). According to the provisions of the Law, Lithuanian and foreign natural persons as well as legal persons are subjects to the real estate tax.
The object of the real estate tax is all the real estate which is in the territory of the Republic of Lithuania, with the exception of:
- Unused real estate, the construction of which is deemed unfinished according to the provisions of the Law on Construction;
- Estate established or acquired on the basis of public and private sector partnership contract. The real estate fee is not paid as long as the real estate is used for the purposes of public-private sector partnership contract;
- Real estate situated in free economic zone.
There are other exceptions applicable to natural persons which are provided in the Art. 7 of the Law.
The tariffs of the real estate tax following January 1, 2013 vary from 0.3% to 3% and are counted from the value of the real estate. The exact percentage of real estate fee is determined by municipalities. While determining the fee, municipalities shall consideration the following criteria:
- The purpose and use of real estate;
- The legal status of real estate;
- Its condition and technical characteristics;
- Taxpayer categories (size, legal form or social status).
Real estate fee for the following year shall be set until June 1 of current year. If a municipality does not set the fee the above mentioned date, it is considered that the fee is equal to 0.3%. It shall be noted that the portion of the price of residential buildings, gardens, garages, farms, greenhouses, buildings used for farming, science, religious or recreational as well as fisheries and civil engineering structures which belong to natural persons and which exceeds 290 000 EUR, shall be taxed by 1% of real estate fee.
The municipalities have the right to exempt natural and legal persons from real estate fees or set lower real estate fee tariffs.
Declarations and payment
The period of the real estate tax is one calendar year. The declarations shall be submitted and the real estate tax shall be paid until February 1 of the year following the period of declaration.
According to the Art. 12 of the Law, legal persons are required to pay advance fees, equal to ¼ of the yearly real estate tax sum. The advance fees shall be paid 3 times a year: until March 31, June 30 and September 30. There is no such requirement for natural persons. It shall be noted that the advance fees shall only be paid for the property, acquired until January 1, and only if the sum of fees exceed 434 EUR per year. In addition to that, advance fees shall not be paid for the property acquired from natural persons. There is no requirement to declare advance fees.
Jovita Valatkaite, attorney at law of the Gencs Valters Law Firm in Vilnius
Practising in fields of Real Estate Law in Latvia, Lithuania and Estonia
T: +370 52 61 10 00
F: +370 52 61 11 00