Real Estate Tax

Real estate tax is payable by Lithuanian and foreign natural and legal persons.  
The object of the tax
Taxable Value
Tax Period
Tax Reliefs
Payment of Real Estate Tax

The object of the tax includes:

1) real estate used for commercial purposes (e. g., administrative, hotel, trade, services, catering purposes) owned by natural persons by the ownership right; real estate used for dwellings, gardening, greenhouses, auxiliary businesses and other purposes specified in the law are taxed only if they are used for economic or individual activities or have been transferred to a legal person for use for a period of unlimited duration or a period longer than one month;

2) real estate owned by legal persons by the ownership right and located in the Republic of Lithuania.

In accordance with the law the real estate tax rate can vary from  0.3% to 1.0% of the taxable value of the real estate. Specific tariff rates are set by municipal councils taking into account one or more of the following criteria:

• purpose of the real estate;
• technical maintenance condition of the real estate;
• taxpayer category (size, legal form or social position);
• location of the real estate in the municipal territory.

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Taxable Value

The average market value of a real estate object is its taxable value.

Taxable value of a real estate property object is determined by VĮ Registrų Centras (Public Entity Centre of Registers) using the mass real estate valuation method with certain exceptions. A taxpayer may file an application requesting that the value of real estate determined by an independent property valuator on individual basis is accepted as the taxable value of the property in cases where the difference between the average market value determined by the independent valuator and VĮ Registrų Centras is larger than 10%.

Taxpayers may find taxable values of the real estate which is owned by them and which is subject to valuation by the mass real estate valuation method on the website of VĮ Registrų Centras free of charge. Where a real estate object is valuated by the replacement value (cost) method the taxpayer shall file an application to VĮ Registrų Centras for determination of taxable value of such real estate.

Valuation of a real estate object must be carried out at least once every five years.

In the transitional period, i. e. in taxable periods of 2006 and 2007, taxable value of real property determined by the mass valuation method will be reduced by the coefficients established in the law and will be calculated as follows:

1) in determining the taxable value of aforesaid real estate object — whose taxable value was established by the replacement value (cost) method before the law came into effect and by the mass valuation method or individual valuation after the law came into effect — the former taxable value of such real estate will be gradually increased by a percentage of the increment in the real estate‘s taxable value (in 2006 – 0.2 of the increment amount, in 2007 – 0.6 of the increment amount);

2) the taxable value of other real estate objects which are valuated by the mass valuation method and for which no taxable value had been determined by 2006 (e. g., property owned by residents, newly constructed property etc.) will amount to the relevant share of the newly determined taxable value in (2006 – 0.5 of the taxable value, in 2007 – 0.8 percent of the taxable value).

One calendar year is the tax period for real estate tax.

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Tax Reliefs

The following are exempt from real estate tax:

• real estate owned by natural persons by the ownership right, used for agricultural activities, educational activities, social care and guardianship, production of articles for religious rites and provision of funeral services as well as real estate located in the territories of cemeteries and used as creative workshops for individual creative activities;
• real estate owned by the LithuanianState and municipalities as well as state and municipal organisations and enterprises;
• real estate owned by diplomatic representative offices and consular offices of foreign states and international intergovernmental organisations or representative offices thereof;
• real estate in free economic areas;
• real estate owned by religious communities, societies and centres;
• real estate owned by associations, charity and support foundations and enterprises providing social services;
• real estate owned by science and study institutions and educational establishments;
• real estate owned by trade unions;
• real estate owned by multi-apartment building owners‘ associations and apartment construction associations;
• real estate owned by agricultural entities and cooperatives;
• real estate of enterprises that have gone bankrupt;
• real estate owned by legal persons and used for the purposes of environmental protection, fire safety or provision of funeral services or located in the territory of a cemetery;
• buildings that have been recognised as unfit for use if they are not actually in use.

Furthermore, municipal councils may exempt a natural or legal person or reduce the real estate tax rate at the expense of their own budgets.

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Payment of Real Estate Tax

Tax payers must pay the real estate tax after the end of the year by 1 February the following year. Taxpayers calculate and declare the tax themselves. The tax on real estate taken over from a natural person for a period of longer than one month is to be calculated and declared by the legal person by whom the property was taken.

Legal persons must pay an advance tax for real estate owned by the ownership right (provided that the tax amount exceeds LTL 1,500 per year): ¼ of the tax amount for the year, three times a year — by 31 March, 30 June and 30 September.

Law on Real Estate Tax was adopted on 7 June 2005, and has been in effect since 1 January 2006. The law replaced the Republic of Lithuania Law on Real Estate Tax Payable by Enterprises and Organisations, which had been in effect from 1995.   

For the purposes of implementation of this law, the Government of the Republic of Lithuania approved, by its resolution No. 1049 of 29 September 2005, Rules Governing the Valuation of Real Estate