Renting Out Housing in Lithuania: About Taxes

"The Kaunas County State Tax Inspectorate continues the "Worth Knowing" campaign to publicize relevant information for residents. The second topic is housing rental and frequently asked questions. 

 

- How to properly formalize the housing lease? - A resident who wants to provide residential real estate rental services can do so in two ways: after purchasing a business license or without one, but then, after the end of the year, until May 2 of the following year must declare rental income and pay 15 percent. personal income tax (PIT).

 

- What business license to purchase? - Residents can rent out their housing after purchasing a business license "Renting of residential premises without providing accommodation services". A separate business license must be purchased for each rented residential object.

 

 - What else is important to know when renting with a business license? - With a business license, a resident can rent only to residents and only residential premises. A business license can be purchased for the desired period (but not less than five days per year, the days may not be consecutive). Accordingly, the fixed-rate income tax payable is calculated proportionally for the selected days of activity. The prices of business licenses are determined by the territory, type and period of execution. The fixed income tax rates for business licenses for the relevant year are approved by the local municipal councils, and the preliminary price of the business license will be calculated using the calculator installed by the Ministry of Finance.

 

 Business licenses can be purchased electronically by logging into My VMI or by calling tel. 8 5 2191 777 or in any VMI territorial unit.

 

- When do additional fees occur? - When renting residential premises, after purchasing a residential premises rental business certificate, it is possible to receive 45,000 euro income during the calendar year.  Over 45 thousand EUR, the excess is taxed at 15 percent at the income tax rate as property rental income, the same as in case without acquiring a business license.

 

- If the apartment is rented to a legal entity? - If the resident rents his premises to a legal entity (company, institution, organization), 15 percent tax must be deducted and paid to the budget by the legal entity paying the income. If the resident did not receive other income that must be declared during the year, he does not have to declare the rental income from the premises received from the legal entity."