Lithuania’s Social Democrats Consider Broader Property Tax on Housing
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Loading... - Lydia Zeno
- 25 Mar 2025
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The ruling Social Democratic Party (LSDP) in Lithuania is contemplating the introduction of a property tax that would apply to all real estate valued over 20,000 euros. This proposal, discussed by the chair of the Budget and Finance Committee, MP Algirdas Sysas, aims to create a more equitable taxation system for housing.
According to Sysas, the taxable value of properties would be determined by the Centre of Registers, and the tax rates would be differentiated based on property value. “The discussion is about making not one, but several increments, up to 150,000 euros,” he stated. The final decision on the tax structure is expected to be made in approximately three months.
Currently, around 60 percent of Lithuania’s housing units are valued below the proposed 20,000-euro threshold, as reported by the Ministry of Finance to the working group on tax changes. Sysas emphasized that discussions are ongoing regarding the application of the lowest property tax rate to housing exceeding this threshold. He noted that if the property is family-owned, its value would effectively double for tax purposes. “Nobody will make a very low threshold,” he added, indicating a cautious approach to the implementation of the tax.
The proposed tax structure would see properties valued below 150,000 euros taxed at a lower rate than the current 0.5 percent. Sysas mentioned that the new rates could be set at either 0.2 percent or 0.3 percent, depending on the property’s value.
Lina Kanišauskienė, head of the Property Valuation Division at the Centre of Registers, confirmed that the Centre will be updating its real estate valuations this year. Preliminary values are expected to be presented in the autumn, with the new valuations coming into effect in 2026. The Centre conducts a mass valuation of real estate every five years, and Kanišauskienė noted that property values have been rising significantly. “If real estate was last appraised for taxes in 2021, statistically, from January this year, the values would rise by up to 70 percent,” she explained.
Currently, residential properties are taxed at progressive rates ranging from 0.5 to 2 percent, but this only applies to properties valued above 150,000 euros. In contrast, the tax on commercial properties is determined by local municipalities.
As discussions continue, the LSDP will need to reach an agreement with its coalition partners before any proposals can be finalized and presented to the parliament for approval. The outcome of these deliberations could significantly impact the housing market and tax landscape in Lithuania, particularly for lower-valued properties.
