Lithuania’s Finance Ministry on Wednesday introduced a draft real estate tax reform that would apply the tax to residential property valued at more than €40,000 per individual, as part of a broader effort to increase fairness and boost funding for national defence.
Under the proposed changes, a tiered tax structure would be implemented for residential, recreational, garden, garage and other non-commercial properties valued over the threshold of €40,000:
- 0.1% for property value between €40,000 and €200,000
- 0.2% for value up to €400,000
- 0.5% for value up to €600,000
- 1% for any value above that
For families with three or more children or those raising a child with a disability, the tax would begin at a higher threshold – €50,000. The tiered rates would then apply as follows:
- 0.1% from €50,000 to €250,000
- 0.2% up to €500,000
- 0.5% up to €750,000
- 1% above that
To reduce the burden on primary homeowners, a 50% reduction in the tax amount would apply to the portion of home value up to €450,000. Families with three or more children or a disabled child would receive a 75% reduction on that portion.
Finance Minister Rimantas Šadžius told BNS in an interview that the real estate tax for a family with an apartment worth around €250,000 would cost €7 per month.
Socially vulnerable individuals receiving state heating subsidies would be exempt from the tax on their primary residence.
The reform also proposes that 50% of the collected real estate tax be allocated to municipal budgets.
Other provisions include taxing unfinished buildings if construction has not progressed within 10 years of permit issuance and if ownership records haven’t been updated in five years. Neglected or abandoned properties could be taxed at a rate of up to 4%.
All commercial real estate, excluding property used for agricultural purposes, would be subject to an additional 0.2% tax, with the revenue earmarked for Lithuania’s Defence Fund.
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