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Everything you need to know is included in our Lithuania Property Pack
Lithuania is an attractive option for foreign investors looking to purchase real estate. It features breathtaking scenery, a unique culture, and friendly inhabitants.
Yet, purchasing property in a foreign country can be complex, especially when considering all the laws and regulations involved.
Do not be alarmed! This guide is here to simplify the process for foreign buyers and provide a clear and easy-to-follow explanation of the property market in Lithuania. We'll cover everything you need to know.
Also, for a more in-depth analysis, you can check our property pack for Lithuania.Can you purchase and own a property in Lithuania as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Lithuania for US citizens.
Understanding the regulations surrounding foreign real estate ownership in Lithuania is crucial, especially for those considering investing in property there.
Firstly, it's important to note that foreigners, regardless of their nationality, are generally allowed to buy real estate in Lithuania. This includes residential properties like apartments and houses.
However, there are certain nuances when it comes to land ownership. While EU citizens face no significant restrictions, non-EU citizens may encounter some limitations.
Specifically, buying agricultural and forest land can be more complex for non-EU citizens, often requiring special government approval.
The rights of foreign property owners in Lithuania are largely similar to those of local residents. Once you own a property, you have the same rights over it as any Lithuanian citizen would. This means you can rent it out, sell it, or pass it on as inheritance under the same conditions as locals.
Regarding special rules, the most notable one is related to strategic areas. In certain locations deemed of strategic importance for national security, additional permissions may be required for purchasing property.
This rule applies to all buyers, both foreign and local, ensuring that sensitive areas are closely monitored.
The country of origin does play a role in the ease of buying property in Lithuania. EU, EEA, and NATO country nationals generally face fewer obstacles compared to others.
However, this doesn't mean it's impossible for non-EU or non-NATO individuals to buy property; it just might involve more paperwork.
Residency in Lithuania is not a prerequisite for buying property. You don’t need to live in Lithuania or have any particular visa or residence permit just for the purpose of buying property. This makes Lithuania an attractive option for foreign investors or those looking for a second home.
Regarding government authorization, it’s mainly relevant for land purchases, especially in sensitive areas or for non-EU citizens.
In most cases, buying a residential property like an apartment or a house won’t require special government approval.
As for a minimum investment, Lithuania doesn’t impose a general minimum investment requirement for buying property. Your investment will depend on the property market and your personal preferences or budget.
Can you become a resident in Lithuania by purchasing and owning a property?
Lithuania did not have a specific real estate investment program that directly grants residency, in the way some other countries do.
This means you can't automatically become a resident just by purchasing property there. However, there are pathways to residency that may be indirectly linked to property investment, especially for business purposes.
If you're considering investing in Lithuanian real estate with the goal of gaining residency, it's important to understand that simply buying a property isn't enough to fulfill residency requirements.
Typically, residency programs that are tied to investment involve making a substantial financial commitment in the country's economy, which could include real estate as part of a larger business investment.
For instance, if you set up a business in Lithuania that involves real estate investment, you might qualify for a residency permit on the basis of being a business owner or investor. This route, however, involves more than just buying property; it requires setting up and running a legitimate business that contributes to the Lithuanian economy.
The requirements for such a residency permit would typically include proving the viability of your business, showing sufficient financial means to support yourself, and possibly creating jobs for locals.
The minimal investment isn't defined specifically for real estate but generally aligns with the requirements for business investment.
Regarding the duration and type of residency, these permits are usually temporary at first. They can be renewed as long as you maintain your investment and comply with other residency requirements.
Over time, you may become eligible for permanent residency, and eventually, this can lead to eligibility for citizenship, subject to fulfilling all the necessary conditions, including length of residence, language proficiency, and understanding of the Lithuanian constitution.
The number of people who have used such a scheme primarily for real estate investment is not readily available.
But it's safe to say that this is not a common pathway to residency compared to other methods like employment, family reunification, or study.
Thinking of buying real estate in Lithuania?
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Market metrics
You can find fresh and updated data in our pack of documents related to the real estate market in Lithuania.
By taking a closer look at the GDP per capita indicator, it becomes apparent that Lithuanian people have become 11.7% richer throughout the past 5 years.
The more people become wealthy, the more they will want to buy real estate, which could make prices go up in the future.
Looking at the data reported by Numbeo, we can see that residential properties in Lithuania offer yields between 2.4% and 5.1%.
These yields are typically seen in markets with average demand and rental rates, where the rental income generated from the property covers the expenses associated with owning and maintaining it, while also providing a modest return on investment.
To know more, you can also read our dedicated article: is it a good time to buy a property in Lithuania?
The expat life
Living as an expat in Lithuania can be an incredibly rewarding experience. The country offers a unique combination of modern amenities and traditional charm. As a result, expats in Lithuania can enjoy a blend of old and new, with the opportunity to explore the country’s rich history, vibrant culture, and stunning natural beauty.
In Lithuania, expats can take advantage of the country’s low cost of living and high quality of life. Lithuanians are known for their hospitality, and expats will find that the locals are friendly and welcoming. English is widely spoken, making it easy for expats to communicate and settle in quickly.
Expats in Lithuania can explore the country’s vibrant cities, including the capital, Vilnius. Here, expats can enjoy a range of cultural and entertainment activities, from concerts and theater performances to museums and galleries. Vilnius is also known for its lively nightlife, with a range of bars and restaurants for expats to explore.
Outside of the cities, expats can find plenty of outdoor activities in Lithuania’s stunning countryside. From hiking and biking trails to lakes and forests, the country offers plenty of opportunities for outdoor exploration. Expats can also take advantage of the country’s numerous beaches, which provide a great way to relax and enjoy the sun.
Overall, living as an expat in Lithuania can be a great experience. With its low cost of living, friendly locals, and stunning natural beauty, Lithuania is an ideal destination for expats looking to explore a new culture and enjoy a high quality of life.
What are the best places to invest in real estate in Lithuania?
This table summarizes some of the best places to buy a property in Lithuania.
| City / Region | Population | Average Price per sqm (EUR) | Strengths |
|---|---|---|---|
| Vilnius | ≈ 580,000 | 1,200 - 2,500 | Capital city, cultural and economic center, UNESCO World Heritage Site |
| Kaunas | ≈ 280,000 | 900 - 2,000 | Second-largest city, historic architecture, vibrant art scene |
| Klaipėda | ≈ 150,000 | 1,000 - 2,500 | Seaport city, access to the Baltic Sea, coastal charm |
| Šiauliai | ≈ 100,000 | 800 - 1,500 | Cultural hub, Hill of Crosses, St. Peter and St. Paul's Cathedral |
| Panevėžys | ≈ 85,000 | 700 - 1,200 | City of culture, museums, annual street art festival |
| Palanga | ≈ 15,000 | 1,500 - 3,000 | Seaside resort, sandy beaches, Palanga Amber Museum |
| Trakai | ≈ 5,000 | 1,500 - 3,000 | Historical town, Trakai Island Castle, scenic lakeside setting |
Want to explore this further?
Do you need a lawyer to buy real estate in Lithuania?
When purchasing a property in Lithuania, engaging a local lawyer can be essential to navigate the legal requirements and ensure a successful transaction.
One crucial document they can assist with is the Purchase-Sale Agreement (Pirkimo-Pardavimo Sutartis), a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Lithuanian lawyer can also help with conducting a Land Register Search (Žemės Registravimo Paieška) to verify the property's ownership status and identify any potential legal issues or encumbrances.
Moreover, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local Land Registry or relevant authorities.
They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Notary Fees, are paid correctly and in compliance with Lithuanian laws and regulations.
What are the risks when purchasing a property in Lithuania?
We've got an article dedicated to the risks associated with purchasing property in Lithuania.
When buying a property in Lithuania, there are a few risks that are not common in other countries.
Firstly, the process of registering a property in Lithuania is different from other countries, as it requires the buyer to register the property with the local municipality. This can be a lengthy and difficult process, and can involve a lot of paperwork.
Secondly, Lithuania does not have a fully developed legal system, which can make it difficult to resolve any disputes that may arise.
Thirdly, Lithuania does not have a comprehensive system of title insurance, meaning that the buyer may not be protected against any potential legal issues or disputes that may arise in the future.
Finally, Lithuania is a relatively small country with a limited real estate market, meaning that buyers may have difficulty finding suitable properties and may have to pay higher prices than in other countries.
Everything you need to know is included in our Lithuania Property Pack
What are the documents needed for a real estate transaction in Lithuania?
When buying a property in Lithuania, the following documents are needed:
1. A purchase agreement signed by both parties.
2. A certificate of title – a document issued by the Land Registry that confirms the seller’s ownership of the property.
3. A cadastral map of the property, showing the exact location and size of the land.
4. A certificate of current zoning of the property.
5. A certificate of registered encumbrances, confirming that the property is free of any liens or mortgages.
6. A certificate of the current state of the property.
7. A certificate of occupancy, confirming that the property is legally habitable.
We review each of these documents and tell you how to use them in our property pack for Lithuania.
How can you negotiate effectively with people from Lithuania?
When engaging in negotiations with individuals from Lithuanian culture, it is essential to consider specific aspects of Lithuanian culture in order to achieve success.
Firstly, Lithuania has a collectivist culture that places importance on strong interpersonal relationships and community. Building trust and establishing a personal connection with your Lithuanian counterparts is crucial. Taking the time to engage in small talk and showing genuine interest in their lives and experiences can lay the foundation for a successful negotiation.
The concept of "Šeima" (family) holds significant importance in Lithuania. Family ties are strong, and decisions may involve consulting with family members. Recognizing and respecting the role of Šeima in decision-making processes can positively influence the negotiation outcomes.
Lithuanians tend to have a reserved communication style and may not engage in excessive small talk or express emotions openly.
Then, maintain a calm and composed demeanor during negotiations, as excessive enthusiasm or overt displays of emotion may be viewed with skepticism.
Punctuality is highly valued in Lithuania. Arrive on time for meetings and adhere to agreed-upon schedules.
Lithuanians appreciate thoroughness and attention to detail. Presenting well-prepared and structured proposals, supported by facts, data, and logical reasoning, can enhance your credibility and increase the likelihood of successful negotiations.
During negotiations, direct and honest communication is appreciated in Lithuania.
However, it is important to maintain a polite and respectful tone. Expressing your opinions and expectations clearly and concisely, while still showing consideration for the other party's perspective, can lead to more fruitful discussions.
Finally, as you may know it already, Lithuania has a rich cultural heritage, including traditional customs, folklore, and historical landmarks. Demonstrating an appreciation for Lithuanian culture and history can help build rapport and establish a positive negotiation atmosphere.
Can foreigners obtain a bank loan in Lithuania?
Yes, foreigners can obtain property loans in Lithuania. The Lithuanian banking system allows non-residents to apply for property loans, subject to certain conditions and requirements.
As a foreigner seeking a property loan in Lithuania, it is generally necessary to possess a valid residence permit, demonstrate stable income, and meet the lending institutions' specific criteria.
SEB Bank Lithuania, Swedbank Lithuania, and Luminor Bank are among the Lithuanian banks that have the potential to offer mortgages to non-resident individuals.
Moreover, mortgage rates in Lithuania for a 20-year term range from 1% to 5%, which are considered highly favorable.
What are the taxes related to a property transaction in Lithuania?
Here is a breakdown of taxes related to a property transaction in Lithuania.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Real Estate Tax | Annual tax on ownership of real estate | A progressive rate of 0.5% to 3% of the cadastral value of the property | Owner |
| Value Added Tax (VAT) | Tax on the sale of new or undeveloped property | 21% of the property value | Buyer |
| Capital Gains Tax | Tax on the capital gain on the sale of a property held for less than five years | 15% on the net capital gain (the difference between the sale and acquisition prices) | Seller |
| Rental Income Tax | Tax on rental income generated from the property | 15% of the rental income after deduction of expenses | Owner |
For a more detailed calculation, refer to:
- the Lithuanian Ministry of Finance's website
- the Lithuanian Ministry of Finance's website
What fees are involved in a property transaction in Lithuania?
Below is a simple breakdown of fees for a property transaction in Lithuania.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| State Fee | Fee for the registration of real estate property rights in the Land Register | 0.03% to 0.5% of the property purchase price or the cadastral value, whichever is higher | Buyer |
| Notary Fee | Fee for notarizing the property transfer documents | Generally around 0.45% of the property value | Buyer |
| Real Estate Agent Fee | Fee charged by real estate agents for their services | Varies between 1.5% and 3% of the property purchase price | Seller |
-Buying property as a foreigner in Latvia: the guide
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