A few days ago, a survey was published in one Facebook group, where apartments for rent in Vilnius are shared, in which those who rent apartments were asked how they would behave after the introduction of real estate tax.
More than 800 Internet users participated in it.
The highest approval rating is 45 percent. of those who took part in the survey – there was an option that the owners of the rented housing would increase the rent by the amount that they would have to pay the tax.
A part of those who took part in the survey (7%) mentioned that they would increase the rent price by the amount of the real estate tax, plus the personal income tax, which still needs to be paid.
It is true that some of the members of the Facebook group mentioned that they would not increase the rent, but there were significantly fewer of them than those who were willing to raise the price (24% of those surveyed in total).
Of course, the survey is far from representative, but it can be used to judge certain possible trends in the influence of the real estate tax on the rental price.
An absolutely real fear
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Social Democrat Gintautas Paluckas, vice-chairman of the Economic Committee of the Seimas, seriously assesses the fact that after the introduction of the real estate tax, the rental price of housing will increase.
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2024-09-12 21:53:05
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The Impact of Real Estate Tax on Rental Prices in Lithuania
A recent survey in a Facebook group focused on renting apartments in Vilnius has sparked concerns about the potential consequences of introducing a real estate tax in Lithuania. The survey, which gathered responses from over 800 internet users, revealed that nearly half of the participants (45%) believe that landlords would increase rent prices by the amount of the real estate tax. This fear is shared by Social Democrat Gintautas Paluckas, vice-chairman of the Economic Committee of the Seimas, who predicts that the rental price of housing will indeed increase after the introduction of the real estate tax.
Real Estate Tax Rates in Lithuania
In Lithuania, real estate is taxed at rates ranging from 0.01% to 4.00% of the property’s value, depending on the location and value of the property [[1]]. According to the State Tax Inspectorate of the Republic of Lithuania, the immovable property tax rate is set between 0.5% and 3% of the taxable value of the immovable property [[2]]. Private real estate is generally taxed at 1% on the property value [[3]].
How Will Real Estate Tax Affect Rental Prices?
While the survey is not representative, it does provide insights into the possible trends in the influence of the real estate tax on rental prices. The results suggest that many landlords would pass on the cost of the real estate tax to tenants, which could lead to increased rental prices. In fact, 7% of the survey participants mentioned that they would increase the rent price by the amount of the real estate tax, plus the personal income tax. This could have significant implications for renters, particularly those on lower incomes.
What Does This Mean for Renters and Landlords?
The introduction of the real estate tax is likely to have a ripple effect on the rental market in Lithuania. Landlords may increase rental prices to offset the cost of the tax, which could lead to higher costs for renters. On the other hand, the tax revenue generated could be used to improve public services and infrastructure, which could benefit both renters and landlords in the long run.
the impact of the real estate tax on rental prices in Lithuania is a topic of concern for many. While the survey is not representative, it does highlight the potential implications of introducing a real estate tax. As the government moves forward with this policy, it is essential to consider the effects on both landlords and renters, and to ensure that the tax revenue generated is used to benefit the community as a whole.
Understanding Real Estate Tax in Lithuania: Impact on Rental Prices
As the introduction of real estate tax in Lithuania approaches, many are wondering about its potential impact on rental prices. A recent survey conducted in a Facebook group for apartment rentals in Vilnius provides some insight into the possible effects of this tax. In this article, we’ll delve into the survey’s findings and explore the current tax landscape in Lithuania.
Survey Results: A Glimpse into the Future
The survey, which garnered over 800 responses, revealed that 45% of participants believe landlords will increase rent prices by the amount of the real estate tax. Another 7% think the rent will rise by the amount of the real estate tax plus personal income tax. While 24% of respondents said they wouldn’t increase the rent, the majority of participants expect prices to go up.
Lithuania’s Tax Environment
To understand the potential impact of real estate tax on rental prices, it’s essential to consider the broader tax environment in Lithuania. According to the Government of Vilnius City Municipality, the main tax rates in Lithuania are as follows:
Corporate profit tax: 15% [[1]]
Value-added tax (VAT): 21% [[1]]
Dividends (withholding tax): 0/15% [[1]]
Personal income tax: 20% [[1]]
* Social security tax: 6.98% paid by the employee [[1]]
Land Tax and Real Estate Tax
Lithuania’s land tax rates range from 0.01% to 4% of the tax value of land, with specific rates set by each municipality [[2]]. Real estate tax, on the other hand, varies from 0.3% to 3% of the property value, with private real estate typically taxed at 1% [[3]].
Expert Insights: An Absolutely Real Fear
Gintautas Paluckas, vice-chairman of the Economic Committee of the Seimas, shares concerns about the potential increase in rental prices following the introduction of real estate tax. This fear is not unfounded, given the survey results and the current tax landscape in Lithuania.
Conclusion
While the survey is not representative of the entire population, it provides a glimpse into the possible trends in the influence of real estate tax on rental prices. As Lithuania’s tax environment continues to evolve, it’s essential to monitor the impact of real estate tax on the rental market and consider its potential effects on affordability and the overall economy.
References:
[1] Government of Vilnius City Municipality – Costs and Taxation
[2] Ministry of Finance of the Republic of Lithuania – Land Tax
[3] Baltic Legal – Taxes in Lithuania
