The process of buying property in Lithuania

Lithuania is one of the largest Baltic countries with a population of about 3 million. The country's economy is one of the fastest growing in the post-Soviet space. In the period from 2001 to 2007, the country's economy grew by an average of 8% per year. In 2009, economic growth went into negative territory, falling by 15%, which was the largest reduction among the EU countries. This was largely due to the resulting bubble in the real estate market. Since 2010, the country has gradually begun to recover from the crisis. Already in 2011, GDP growth was 6% - the second fastest growth in the EU. Growth in 2013 was moderate and healthy at 3.3%. According to the forecast of the European Commission, in 2014 this figure will be 3.3%, and in 2015 - 3.7%. Drawing up a contract Foreigners do not have any restrictions on the purchase of real estate in Lithuania . The only limitation concerns the purchase of land. In this case, it is possible either to lease land from the state for 99 years, or to acquire it through a legal entity registered in Lithuania. It is also possible to rent directly from the property owner. All transactions for the purchase and sale of real estate in Lithuania are carried out with the help of a notary. First, in the presence of a notary, a sales contract is drawn up in Lithuanian. This document is the basis for the transfer of funds. While the buyer is transferring funds from his Russian account, the notary checks the registration and cadastral data on the property, its legal status, etc. Due to the complete automation of the notarial verification process, this procedure takes no more than 3 working days. There are three options for transferring money to Lithuania - transfer to a special notary account, opening your own account in a Lithuanian bank, and transferring funds to a special account of a real estate agency with which the buyer works. There are no legislative restrictions on opening an account by a foreigner in Lithuanian banks, however, in practice, many banks refuse to work with clients from Russia. When transferring funds to a notary's account, the buyer is charged a fee for keeping funds from the total value of the transaction. Due to the high cost of this transfer method, many Russian buyers use the services of agencies that register their own accounts under the appropriate agreement. The total notary costs are about 0.5%. Taking into account the agency's commission, the total expenses from the transaction usually do not exceed 5.5%, in the event that the transfer of funds is not carried out with the help of a notary. After paying the required amount under the contract and tax payments, the buyer can be considered the owner of the property. Registration of the transaction in the land registry is not mandatory, but it is desirable to protect the interests of both parties. Receiving a cadastral extract takes 3, 5, 10 days, depending on the amount that the buyer is willing to pay to speed up the process. The registration fee is 1448 euros. In the event that the subject of the transaction is both real estate and land, the amount of the registration fee will be 2,896 euros. In case of purchasing land, the buyer needs to register a legal entity in Lithuania. The cost of starting a company is approximately 3000 euros, plus 500-1000 euros for annual maintenance. The registration time usually takes about 2 months. Tax legislation Non-residents of Lithuania pay taxes only from Lithuanian sources of income. Spouses are taxed separately. The tax year corresponds to the calendar year. Rental income tax is 15%. Land tax in Lithuania depends on the specific municipality and varies in the range from 0.01% to 4%. For a land plot with an area of 5 acres, this is about 45 euros per year. The annual real estate tax in Lithuania is paid only if the value of real estate exceeds 1 million euros. However, the amount is calculated based on the amount of real estate owned by the owner, as well as the total amount of all tax payments. In Vilnius, the municipal tax averages 40 euros per year. The editors of the portal would like to thank Elena Utyumova ( Indom ) for her help in preparing the material.