You may need to empty your wallet when you move to a new home and do not complete this procedure

Mantas Milašauskas, the head of the pridavimai.lt portal, recounted this in a press release, who shared the arguments he heard in favor and against the handover of the house.

Why add a built home?

Arguments for adding a house

There is a pity

According to M. Milašauskas, one of the scariest arguments for people is the fine for an unregistered house. Many of the problems facing the state are being addressed through a mechanism of fines and penalties. The real estate sector is no exception.

“A fine for illegal construction, a fine for failure to notify the construction, a fine for prohibited detours in construction, and even a fine for living in an unattended house or a fine for unfinished construction without registering,” said the interlocutor.

Although currently issued building permits are valid indefinitely, according to article 39 (1) of the Construction Law, a special or non-special structure not finished or rebuilt, as well as a simple structure not finished for its reconstruction into a special structure or not special. The structure must be registered in the Real Estate Registry (NTR) no later than 3 years from the date of issuance of the building permit.

In accordance with subsection 5 of article 28 of the Construction Law, after completing the construction completion procedures (upon receipt of the construction completion certificate or upon drafting the construction completion declaration), the building and property rights must be registered with the Realtor. Register (NTR) no later than 3 months from the date of receipt.

The violation of the NTR procedure for the registration of a structure and property rights over it and the correction of the cadastral data of unfinished or reconstructed structures implies a fine of 145 euros to 290 euros, for a legal person, from 290 to 580 euros. Municipal administrations also have the right to apply administrative responsibility for the use of non-residential buildings that will be registered without completing the construction completion procedures and without registering with the NTR. The use of the building (its facilities) in violation of the requirements established in the Construction Law and other laws implies a fine for a natural person of 144 to 1,448 euros, for a legal person, of 1,448 to 7,240 euros.

The specialist is convinced that refusing to comply with this obligation may require a strong shake of the wallet. Access to the horizons of inspection bodies is possible both randomly (regular raids) and on purpose, for example, thanks to a jealous and angry neighbor.

Residence registration

Many factors that improve the quality of life are related to the declaration of residence, such as:
• kindergartens,
• schools
• the opportunity to vote,
• participation in community activities,
• registration in medical institutions
• GPM relief (see next point for details) and so on.

You need to have a declared place of residence to enjoy these things. You need registered real estate to have a place to file. If the house is built but not attached? Unfortunately.

The director of the pridavimai.lt portal, which brings together people who participate in housing registration services, recalls that several other issues are closely related to the registration of a place of residence:

What percentage of the home completion must be recorded to declare your place of residence?

Reading the law is not enough to answer this question. The declaration of residence is defined by the law of approval of the rules of declaration of residence. However, it does not detail such nuance as the percentage of completion of the house. I had to call the responsible authorities and explain. It turns out that the criterion of reasonableness should apply here. As it is clear that at the end of the house, let’s say 20 percent. (foundations and walls): it is not yet possible to live in it. The same can be said for about 85 percent. The family living in concrete – partial finishing – has not yet been accepted. However, in practice, responsible employees of the elderly / municipalities accept the declared place even in an unfinished house. Since the law does not set a specific completion rate, everyone does what they please. In practice, we had to see the declared places of residence and with 40 percent. and with 90 percent. I complete it.

So is it necessary to add a completely finished house to register residency? Is the registration of unfinished constructions sufficient?

Unfinished construction is usually sufficient for ~ 70 percent. and more. However, taking all the arguments into account, 100%. validation is still needed.

Tax liabilities for the sale of real estate

Building a house and coming up with ideas to sell it in the future is a very serious argument. For many years, the PIT Act has provided a PIT tax relief on assets sold that have been held for ten years, that is, acquired or registered ten years ago:

… Proceeds from the sale or other transfer of ownership during the tax period of the sale or other transfer of real estate other than those mentioned in points 53 and 54 of this Part located in a country of the European Economic Area, if such goods were acquired plus more than 10 years prior to the sale or other transfer of ownership;

Or the place of residence has been declared for at least two years. Quoting Article 53 of Article 17 of the Law on Personal Income Tax of the Republic of Lithuania:

… Income from the sale or other transfer of ownership of a home (including land leased) located in a country of the European Economic Area, if it was the residence of the resident in the last 2 years before the sale or other transfer of ownership, declared according to the law.

So if you do not rule out the possibility of selling the house in the future, it is definitely beneficial to legalize it and keep the established term.

Promise to the bank

The specialist ensures that everything is very simple in this regard. If bank financing is required, you will be forced to register and pledge the property multiple times.

“Upon completion of the home construction, a time frame will be provided indicating the time within which the home must be legally completed.” – says the interlocutor. – “In case of breach of the agreements, the bank can raise interest rates or otherwise sanction the breach of the credit agreement. Based on the practice of pridavimai.lt, I can say that about half of all our work is aimed at obtaining financing and pledging assets to the bank ”.

Gift, inheritance

An argument that is often heard from older people. The houses are built, but not completely neat. When they think about the will, what to leave the children, how to divide the property, parents do not want to leave the ends in a mess, so they start to take care of it themselves.

“It also happens that when living conditions change in old age, you have to change your home. It seems that the house is not attached and then you have to deal with detectives, interpret and manage ”, – M. Milašauskas shares his experience.

Parama

The interviewee recalls that this year, even some clients rushed to ask for help to add a house as soon as possible because they wanted to enter support programs for the installation of solar power plants.

“I did not explain the descriptions of those programs in detail, but as far as I understand, one of the requirements is a fully surrendered house. This requirement applies to solar power plants that wish to receive support to change the boiler and possibly even to change slate cladding.

Nobody knows what programs we will get in the future. However, practice shows that to be eligible for official support, you must have officially registered assets.

Arguments BEFORE adding the house

At the end of the conversation, the director of pridavimai.lt listed the situations in which people refuse to give up their homes. There are cases where houses are built with illegal funds. It is feared to register so that such suspicions are not raised by the responsible authorities.

“He won’t get away with it, one day the problem will have to be addressed. Why not now?” – asks the expert. – “Sometimes there is a fear of the property tax. I have also heard such an excuse. But we live in a state governed by the rule of law and we must all abide by its laws. “

“Many also think that giving away a home is an expensive procedure. Yes, adding a house costs money, but historically, many services in Lithuania have only become more expensive. All household paper services are no exception. I’m not sure if waiting a bit will save me. Probably the opposite. “

If, for any reason, a house is built illegally, for example without a project, a building permit, built in an unauthorized area, etc., legalizing the house may be complicated or legalization may not be possible in absolute.

In any case, in each situation it is necessary to dig deeper and find the optimal solution. Practice shows that the road is generally neither short nor cheap. But it is worth a try.

M. Milašauskas even shared a rather humorous argument: avoiding the garbage collection tax. “It just came to our attention then. It’s true, maybe it’s only heard twice in ten years. In that case, it’s hard to even comment on anything.” – assures the man.

During the conversation, we became convinced that the question of searching a house sooner or later still needs to be resolved. Don’t waste time, and if you don’t have it or you have unforeseen problems, contact professionals who are always ready to help you.