Guide to Property Taxes in Lithuania

Non-resident individuals are generally subject to Lithuanian taxation on income derived from Lithuanian sources, including rental income and taxable gains arising from real estate situated in Lithuania.

Married individuals are generally taxed separately. The Lithuanian tax year corresponds to the calendar year.

Income Tax

From 2026, Lithuania applies a broader progressive personal income tax system. The principal annual income tax bands are:

Special rules apply to certain categories of investment and property income, including rental income and gains from the disposal of real estate.

Rental Income

Rental income derived from Lithuanian real estate by a non-resident individual is taxable in Lithuania.

From 2026, qualifying rental and other specified non-employment income is generally taxed at 15% where the relevant annual income does not exceed €27,745.80 (12 VDU).

Where the combined relevant annual income exceeds €27,745.80, the portion above that threshold becomes subject to the progressive tax structure. Depending on the taxpayer's total relevant taxable income, rates of 20%, 25% and 32% may therefore apply to higher levels of rental income.

Consequently, rental income should no longer be described simply as being taxed at 15% up to €253,065 and 20% thereafter. That was based on the rules applicable before the 2026 tax reform.

For comparison purposes, assuming the non-resident landlord has no other relevant Lithuanian taxable income, annual rental income of €18,000, €72,000 and €144,000 results in estimated personal income tax of approximately €2,700, €13,013 and €30,820, respectively. This corresponds to effective tax burdens of approximately 15.0%, 18.1% and 21.4% of gross rental income, reflecting Lithuania's progressive taxation of rental income from 2026.

Corporate Tax

From 1 January 2026, the standard Lithuanian corporate income tax rate is 17%.

Lithuanian companies are generally taxed on their taxable profits after deducting qualifying business expenses. Accordingly, rental income and taxable gains arising from real estate held by a Lithuanian company are generally included in taxable corporate profits.

Qualifying small companies may benefit from reduced rates, including a 7% rate, or potentially a 0% rate during their first two tax periods, subject to the applicable eligibility requirements.

A foreign company receiving income from the sale or lease of Lithuanian real estate without operating through a Lithuanian permanent establishment may generally be subject to 17% withholding tax from 2026, subject to applicable domestic relief or double taxation treaty provisions.

Capital Gains Tax

Lithuania does not impose a separate capital gains tax. Instead, taxable gains from the disposal of real estate are subject to personal income tax.

The taxable gain is broadly calculated as the difference between the property's sale proceeds and its qualifying acquisition cost, together with other deductible expenses permitted under Lithuanian law.

From 2026, taxable real estate gains generally fall within the same special income framework as rental and certain other non-employment income. A 15% rate applies where the relevant annual income does not exceed €27,745.80 (12 VDU). Income exceeding that threshold can be subject to progressive rates of 20%, 25% and 32%, depending on the taxpayer's total relevant taxable income.

Importantly, from 1 January 2026, gains from the disposal of real estate that has been owned for at least five years are generally exempt from personal income tax, subject to the applicable conditions.

This replaces the previous 10-year ownership requirement.

Additional exemptions may apply to qualifying principal residences where the statutory residence and reinvestment conditions are satisfied.

Property Buying and Selling Taxes/Costs

Property Taxes

Land Tax

Owners of private land in Lithuania, including non-residents, are generally subject to an annual Land Tax.

The tax is calculated on the taxable value of the land determined under Lithuania's mass valuation system. Municipalities establish the applicable rate, which can generally range from 0.01% to 4% of the taxable land value.

The actual tax burden therefore depends on the location, taxable value and classification of the land, as well as the rate established by the relevant municipality.

Real Estate Tax

Lithuania also imposes an annual Real Estate Tax on qualifying buildings and other taxable real estate.

From 2026, residential property owned by individuals is subject to revised taxation rules. A taxpayer's qualifying principal residence benefits from a municipal tax-free threshold of at least €450,000 of taxable value, with municipalities permitted to establish a higher threshold.

The portion of a principal residence exceeding the applicable exemption is subject to a municipal rate ranging from 0.1% to 1%.

For other residential real estate, including second homes and investment properties, progressive rates generally apply according to the property's taxable value:

• 0% on the portion up to €50,000;

• 0.2% on the portion from €50,000 to €200,000;

• 0.4% on the portion from €200,000 to €400,000;

• 0.6% on the portion from €400,000 to €600,000;

• 0.8% on the portion from €600,000 to €1 million; and

• 1% on the portion exceeding €1 million.

The tax is calculated on the property's taxable value determined under Lithuania's official valuation system, rather than necessarily on its actual purchase price or current market value.

Consequently, non-resident investors holding residential property in Lithuania should generally expect the rules for non-primary residential property to be the most relevant for determining their annual Real Estate Tax liability.