Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Lithuania Introduces Tax for Homeowners on Expensive Property

Don't Miss Out —
Follow us on:

Dec. 21 (Bloomberg) -- The Lithuanian Parliament gave final approval to introduce a tax for homeowners who hold more expensive property as the country seeks budget revenue sources.

Lawmakers approved the law in a 76-5 vote today, with 21 abstentions, to tax the value of real-estate that exceeds 1 million litai ($378,000), according to Parliament’s website. The value exceeding the untaxed 1 million litai threshold will be levied 1 percent per year.

The Baltic nation is introducing a real-estate tax, which has been recommended by the International Monetary Fund for the past few years to expand the budget revenue tax base. The Finance Ministry estimates the so-called “luxury property tax” will add 17 million litai in additional revenue.

The tax may have some “negative effect on demand” for more expensive real-estate, Saulius Vagonis, an analyst at real-estate brokers Ober-Haus in Vilnius, said by phone. “Buyers will now also consider the costs of maintaining the property.”

The Baltic nation’s real estate in the capital of Vilnius remains 28 percent cheaper, compared with price levels before the global economic crisis in 2008, the nation’s registry office said yesterday. Outside of Vilnius, prices are 42 percent below the levels three years ago, it said.

“It’s not a good time to sell, the market is dormant,” Vagonis said. “So owners of more expensive assets are unlikely to increase the supply in a depressive sell-off.”

To contact the reporter on this story: Milda Seputyte in Vilnius at mseputyte@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.