Pros for obtaining a property in Lithuania
There is a number of reasons you should consider putting your money into the Vilnius real estate market. Prices in Vilnius are reasonable at the average rate of 1,700 EUR per square meter. Although new apartments around the Old Town and the city center go for a lot more; 3,000 - 5,000 EUR per sq/m. Outside of the city center prices are much more affordable; 1,700 - 2,200 EUR per m2.
Yield: around 6%. Exceptionally low buy-sell costs, except for new builds, where the hefty 21% VAT is added. The notary and registration fees come down to less than 5%; the seller fees are around 3%.
Excellent GDP growth of Lithuania proven by the fact that even during the pandemics the economy dropped by 0.8%! (In the UK GDP dropped by 9.9% in 2020).
Employment conditions: when it was 17.8% in 2010, it dropped to 6% in 2020.
Salary growth (similar to Latvia): from 5% to 15% annual growth in the last 5 years; rising to 916 EUR per month from 500 EUR per month in the last 6 years. The government debt grew during the pandemic, just as it grew in every single country in the world. But while in the UK it grew by 100% plus during the pandemic, in LT it grew up to 48%.
Fintech industry has benefited a lot from the foreign investments. Also it is a country of Revolut and a lot of other super-successful business startups.
Highly educated population: 125,000(!) students in a country of such a low population.
Additionally tourism in Lithuania is on the rise as well as the population is steady.
Residence permits on the grounds of company formation
Contact Lee & Bronski Support to learn about the latest options, as they do change frequently. You may apply for a residence permit after 6 months of setting up a company. You would need to establish a company with 29,000 EUR share capital and employ 3 Lithuanian citizens or workers with residency permits. To obtain a permanent residency you must live in Lithuania for a period of 5 years of "temporaries".
Taxes & Rental income tax
Capital Gains Tax is 15% and the Rental Income Tax is 15% with deductions of 30% allowed. If you get more than 163,000 EUR in a year for rental income you will pay additional 20%. No gift tax, no inheritance tax and property tax up to 150,000 EUR is 0%. Owning a 150-300k EUR you will pay 0.5% property tax, and then for real estate worth 300k-500k you will pay 1%. You should be charged 2% over a property valued 0.5M EUR.
Other residence types in Lithuania
There is a variety of other residence types you may choose from and they go about the standard - education, marriage, naturalization, etc.
Which residence permits offer a path to permanent residency and citizenship?
The Lithuanian passport will allow you access to 180 countries and territories making it the world's 9th best passport to get. After 10 years of living in Lithuania you may apply for citizenship. You would have to pass a Lithuanian language test. Under certain circumstances Lee & Bronski may help you with obtaining the Lithuanian citizenship on the go, without the previously stated requirements.
Restrictions & Challenges
Rental yields are not amazing, but on the rise.