Lithuanian real property tax

Seeking additional progressiveness of the taxation system and making richer inhabitants contribute the sponsorship of the public expenses; from the 1st of January 2012 not only the real estate used for business purposes, but also all the other real estate is taxed by real estate tax. All the real estate which's value exceeds 290.000 EUR will be taxed by 0,3 % to 1 % real estate tax. Particular tax rate has to be determined by the municipalities. It is important that only this value part which exceeds 290.000 EUR will be taxed by the real estate tax. These real estate tax changes were passes according to the international practice and recommendations of International Currency Fund.

At the end of the year 2011 the new project of the Law on the Land Tax was registered. The amendments in this law (in case it is accepted by the Parliament) should be applied since 2013. The main idea of these amendments is to tax the land according to its market value, which would be assessed for 5 years by the evaluation in a mass or individual way. The land tax rate limits would be 0,01 – 4 % and the particular rate would be assessed by municipalities. In comparison, now the land tax rate is 1,5 % from the value of the land. The difference is that according to the current law this value is not market value, but normative value, which usually does not correspond the real value and is much lower. Furthermore, the exemptions for the rural economy land would be applied. Normally, for the rural economy big territories are necessary and the economic benefit received from it is limited. Therefore, the 0,35 % value reduction coefficient would be applied. Moreover, the tax amount would not exceed 30 Eurocents for 1 are of a cultivated land in the years 2013 – 2017.