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• If the title of the leased property is transferred to the third
party, the acquirer of the property can choose to terminate
the lease, unless the lease agreement is registered with the
Real Estate Register.
• Prior termination date the landlord may terminate the lease
agreement if: (i) the tenant damages the property or uses it
contrary to its purpose; (ii) the tenant fails to pay the rent fee;
(iii) the tenant does not maintain the property if undertook so;
(iv) there are other grounds specified in the lease agreement.
• Prior termination date the tenant may terminate the lease
agreement if: (i) the landlord does not maintain the property
if undertook so; (ii) the property without fault of the tenant
becomes impossible to use; (iii) the landlord does not transfer
the property or hinder the proper use of the property; (iv)
there are other grounds specified in the lease agreement.
Rent fee and indexation
• Rent is usually paid monthly and does not include any utilities
or costs of other energy resources paid by the tenant.
• The Civil Code allows the parties to agree on any means of
rent payment and calculation, i.e. fixed fee, periodical fee,
services, improvement of quality of the leased property, etc.
• If the rent fee or its calculation is not set in the lease
agreement, the parties may turn to the court to appoint
independent experts to calculate the rent fee.
• Generally, the parties agree on annual adjustment of rent fee
based on Customer Price Index released by the Department of
Statistics of the Republic of Lithuania. Other common practice
is to agree on annual change of the rent fee on mutual
agreement. Pursuant to the Civil Code, the rent fee cannot be
adjusted for more than twice a year.
TAX
• Lithuanian and foreign natural and legal entities are real estate
taxpayers.
• The annual rate of the non-residential real estate tax is set
annually by the local municipalities and ranges between
0.3% – 3% of the real estates’ taxable value.
• From the 1st January 2015 natural persons are subject to 0.5%
real estate tax rate. The real estate tax is paid for residential
real estate’s, owned or acquired by natural persons, taxable
value exceeding aggregate value of EUR 220 000.
Direct acquisition of a property
• The acquisition of a property gives rise to either personal
income tax or value added tax (VAT).
• If the property is acquired by legal entities:
–– 15% personal income tax; and
–– 21% VAT must be paid.
• If the property is acquired by private individual:
–– personal income tax is not payable if the property is
maintained for more than 5 years (if not – 15% income tax
must be paid);
–– if the transaction is an individual, VAT is not applicable;
If a private individual is engaged in this kind of economic
activity – 21% VAT must be paid.
• In addition, typical property transfer fee to notary public is
around 0.45% of the purchase price; however, the cap of
maximum fee, if one real estate object is being transferred,
is EUR 5 792,40.
Acquisition of shares in a company holding a property
• If company‘s shares are transferred by legal entity:
–– personal income tax is not payable if the company’s
shares current vendor is maintained for at least 2 years;
–– VAT for transfer of shares is not applicable.
• If company‘s shares are transferred by private individual:
–– 15% personal income tax from earned incomes is
applicable;
–– VAT is not applicable.
• Since 1st January 2015 sale-purchase agreements of private
limited liability companies’ shares must be authorized by
notary public if 25% or more shares of the private limited
liability companies are sold or the selling price of shares is
higher than EUR 14 500.
• The notary fee for authorization of securities transaction
ranges from 0.4% to 0.5% of the securities transfer price;
however, the cap of maximum fee is EUR 5 792.40.
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Investors Guide to Europe 2015