We want to change the real estate tax procedure: it should increase

“What is established now is not really a property tax or a luxury tax, it is more of a misunderstanding. I think that the discussions about the possibility of a normal municipal property tax in Lithuania, I would like to believe that they are not closed. But I think there will be more discussions about it in the autumn, “I. Šimonytė told reporters at the Seimas.

“The property tax debate is as old as a restored state, although the restored state is young, but it has been enough for this debate for many years,” he added.

Deputy Finance Minister Rūta Bilkštytė says the new property tax model should become clear in the fall, after it has been discussed in the tax review working group.

“In the Ministry of Finance, in the tax review working group in the direction of income inequality of the population, which includes the real estate tax and strengthening the independence of self-government, since the real estate tax it goes mainly to the local government budget, we plan to discuss it in September, “R. Bilkštytė told BNS.

According to her, the new real estate tax model will include benefits.

“Currently, it is as if there is a general taxation of real estate, but it is not the object of the real estate that is subject to tax, but the sum of the value of the property – if the value of the real estate is greater, then it is taxed. Therefore, in principle, that tax-free amount can be considered a tax benefit, ”said R. Bilkštytė.

“We move on to the fact that property must be taxed correctly and that justice is a matter of debate: whether to tax by amounts or by objects,” he added.

According to the deputy minister, it is not yet clear what the new model will look like, but it is implicitly recognized that the tax should increase.

“Reduce budget indebtedness, all commitments to both retirees and doctors’ salaries, there is so much pressure to increase income (…), but there is a working group to hear both the professional conclusions and the counterarguments of the partnership partners, “said R. Bilkštytė.

According to the Deputy Minister of Finance, discussions about the real estate tax are inevitable also because according to the decision of the Constitutional Court (CC), the modifications to the real estate tax adopted in 2019 together with the budget law are no longer valid as of July next year.

In December 2019, the Seimas approved the expansion of the real estate tax base and established that as of 2020, the tax will be paid by anyone who is more expensive than 150 thousand. Property owners of EUR (instead of 220 thousand EUR) and for families raising three or more children or a disabled child, reduced this limit to 286 thousand EUR. up to 200 thousand. euros.

Last June, the Seimas had begun considering conservative Mykolas Majauskas’s proposal to postpone the higher property tax for a year.

However, the government did not approve such an amendment to the Property Tax Law, and the amendments, which were to be considered further in the fall, were not accepted.