Acquisition of Real Estate in Lithuania by Foreign Nationals
For decades, real estate has been considered an excellent asset for capital investment. For this reason, both residents and non-residents consider real estate in Lithuania (as EU member state) a profitable asset. If you have decided to acquire real estate in Lithuania for investment, residence or business, here are what you should know about the special aspects of the acquisition and about property taxes in Lithuania.
1. Who can buy real estate in Lithuania?
Commercial and residential real estate in Lithuania can be acquired by citizens of Lithuania, citizens of foreign countries and also legal entities. There is also no age limit for private persons.
2. Are there restrictions on acquisition of real estate by foreigners?
Foreigners can acquire all types of real estate in Lithuania, except agricultural and forest land. It should also be mentioned that foreign nationals may be subject to certain restrictions on acquisition of real estate in certain locations. This applies to properties in border areas, dune areas, and coastal zones. In such cases, a permit for acquisition may have to be issued by local authorities. With regard to land, foreign nationals are not allowed to acquire it, but can rent it instead.
3. Is there a residential property tax in Lithuania?
There are no taxes on residential real estate in Lithuania, except for high-value real estate, or so-called exclusive properties. High-value properties are taxed in Lithuania. Until 2019, property whose value does not exceed 286,000 euros was exempt from property tax, according to the Lithuanian Tax Authority. In 2020, amendments in the tax law came into force, according to which property whose value does not exceed 150,000 euros is exempt from property tax. For families with three or more children, the respective threshold is up to 220,000 euros. The annual property tax in Lithuania is 1.5%, but the law provides various exemptions for taxpayers.
4. How much is the tax on high-value property?
As mentioned earlier, Lithuania taxes ownership of expensive property. If the value of the property exceeds 150,000 euros, a 1% tax is levied on the acquisition.
5. Are there any taxes on commercial real estate in Lithuania?
The tax on commercial real estate in Lithuania ranges from 0.3 to 1%.
6. Does ownership of property in Lithuania grant permanent residence?
Ownership of real estate in Lithuania does not grant the right of residence in the country. The owner of the property may visit Lithuania on a tourist visa or on the basis of another permit, but this does not depend on the ownership of immovable property in Lithuania. However, when submitting documents for a residence permit or permanent residence, real estate owned by a foreign national in Lithuania can have a positive impact on the decision-making, since it is an indication of the applicant’s solvency and long-term intentions.
7. Can foreign nationals obtain a mortgage to purchase real estate in Lithuania?
As a rule, Lithuanian banks do not provide real estate loans to nationals of other countries, but real estate can be regarded as a factor that connects the foreign national to Lithuania as is the ownership of a company in Lithuania, the employment of people in Lithuania, cooperation with Lithuanian companies and ownership of assets on the territory of Lithuania.
8. What is the process of buying real estate, and when one needs to pay property tax in Lithuania?
As a rule, the acquisition of immovable property in Lithuania can be divided into the following steps, including the payment of tax (if applicable):
- Obtaining a certificate from the Real Estate Registration Center confirming the seller’s ownership of the property.
- Conclusion of a preliminary purchase and sale contract and advance payment to the seller in the amount of 10% of the purchase amount.
- Drafting and signing of a notarised contract.
- Exchange of necessary documents with the seller and settlement,
- Payment of property tax, if applicable.
- Submission by a notary of documents to the Real Estate Registration Center on the conclusion of a transaction, including a contract of sale, a certificate of the absence of debts on real estate taxes, inventory document, consent of the seller’s spouse (if any) for sale, receipts for payment of administrative tax and property tax.
Since 2016, legal experts and accountants of Company in Lithuania UAB have helped individuals and legal entities to successfully conclude contracts for the sale and purchase of property in Lithuania and in timely payment of property taxes, if applicable. If you wish to acquire residential or non-residential property in Lithuania, we are ready to provide you with legal support at all stages of the transaction: from finding suitable property and negotiating the purchase price with the owner to the signing of the notarised deed.