Financial Preparation

• Determine your total investment budget (property + transaction costs + reserves)
• Establish a currency exchange strategy (EUR/USD or EUR/CAD)
• Research historical exchange rates to identify favorable timing
• Set up international wire transfer capabilities with your home bank
• Consider opening a Lithuanian or EU bank account (relatively straightforward process)
• Evaluate tax implications in both Lithuania and your home country
• Arrange financing if needed (pre-approval in principle or evidence of funds)

Market Research

• Identify target cities based on investment goals (capital growth vs. rental yield)
• Research neighborhood-specific price trends and rental yields
• Join online forums for property investors (expat.com, Facebook groups)
• Subscribe to property market reports (Ober-Haus, Inreal, RE/MAX Lithuania)
• Analyze infrastructure projects and EU-funded development zones
• Research tenant demographics and rental demand in target areas
• Plan a preliminary market visit to evaluate areas firsthand

Professional Network Development

• Connect with English-speaking Lithuanian attorneys specializing in real estate
• Identify real estate agencies with experience assisting foreign buyers
• Research property management companies in your target market
• Establish contact with currency exchange specialists (e.g., Wise, Revolut)
• Find a Lithuanian accountant familiar with non-resident investor concerns
• Connect with building inspectors for property assessments
• Consider notary options (required for property transactions)

Expert Tip: The Lithuanian property market has distinct seasonality, with spring (April-June) and early autumn (September-October) being the most active periods with the broadest selection. Winter months see reduced activity due to harsh weather conditions, but can offer better negotiating positions. Summer months see increased competition for coastal properties but reduced activity in Vilnius as locals vacation. Time your property viewing trip and purchase offers strategically based on these seasonal patterns.

Recent Regulatory Change: The Lithuanian government has simplified the UAB formation process with the introduction of electronic registration services. As of 2024, a UAB can be established remotely in approximately 3 business days, compared to 2-3 weeks previously. The minimum share capital can now be contributed electronically, eliminating the need for a physical bank visit. These changes make the corporate ownership route more accessible for foreign investors seeking liability protection and tax optimization.

Banking Setup

• Lithuanian Bank Account Options:
  • Traditional Lithuanian banks: Swedbank, SEB, Luminor offer non-resident accounts
  • International banks with Lithuanian presence: Nordea, Danske Bank
  • Fintech alternatives: Revolut, Wise, Paysera (Lithuanian fintech) offer euro accounts
• Typical Requirements:
  • Passport/identification
  • Proof of address (in home country)
  • Source of funds documentation
  • Tax residency information
  • In-person visit for traditional banks (some fintechs offer remote setup)
• Banking Features:
  • Euro-denominated accounts standard (Lithuania uses Euro since 2015)
  • Online banking available in English
  • Mobile banking applications
  • International transfer capabilities
  • Investment and savings options

Financing Options

While cash purchases are common among foreign investors, financing options include:

1. Lithuanian Mortgages for Foreign Nationals:
   • Availability: Major banks offer mortgages to non-residents, particularly EU/EEA, US, and Canadian citizens
   • Deposit Requirements: Typically 30-50% for foreign buyers (higher than for Lithuanian residents)
   • Interest Rates: 3-5% (as of 2025), variable or fixed options
   • Income Requirements: Usually 3-4x annual mortgage payment in stable, documentable income
   • Documentation: Income verification, credit history, property valuation, and additional due diligence
2. International Financing:
   • International banks operating in both Lithuania and North America
   • Home equity lines of credit or refinancing existing properties in North America
   • Portfolio loans against investment accounts in home country
   • May offer better rates than Lithuanian non-resident mortgages
3. Developer Financing:
   • Some large developers offer payment plans for new developments
   • Typically requires 20-30% down payment with installments during construction
   • Final payment upon completion or short-term financing options
   • Less stringent qualification process than traditional mortgages

Currency Management

Managing currency exchanges between USD/CAD and the Euro requires strategic planning:

• Exchange Rate Considerations:
  • Monitor EUR/USD and EUR/CAD trends to identify favorable exchange windows
  • Consider working with a currency specialist offering rate alerts
  • Strong USD/CAD means more purchasing power in Lithuania
• Currency Services:
  • Specialized services like Wise, Revolut, or OFX typically offer better rates than banks
  • Forward contracts can lock in exchange rates for future payments
  • Local Lithuanian fintechs like Paysera offer competitive exchange rates
• Income Repatriation:
  • Consider timing of rental income transfers to home country
  • Set up automated regular transfers to average out exchange rate fluctuations
  • Maintain accurate records for tax purposes in both countries

The Euro has shown relative stability as a major global currency, though fluctuations against USD and CAD do occur. The adoption of the Euro in 2015 eliminated previous currency risks associated with the Lithuanian Litas and integrated the country into the Eurozone monetary system, providing additional stability for foreign investors.

Property Search Resources

• Online Property Portals:
  • Aruodas.lt – Lithuania’s largest property portal (has English version)
  • Domoplius.lt – Comprehensive property listings
  • Capital.lt – Focus on premium and investment properties
  • Remax.lt – International agency with English support
• Real Estate Agencies:
  • International chains: RE/MAX, Ober-Haus, Century 21
  • Local agencies: Capital, InReal, Vilnius Sotheby’s International Realty
  • New development specialists: YIT Lietuva, Hanner, Darnu Group
  • Note: Most agencies represent the seller, not the buyer
• Property Auctions:
  • Court-enforced auctions: evarzytynes.lt (government platform)
  • Private auctions occasionally held by banks or developers
  • Potential for below-market purchases but requires additional due diligence
• Buying Agents:
  • Some international agencies offer buyer representation services
  • Independent property consultants available in major cities
  • Particularly valuable for non-Lithuanian speakers
  • Typically charge 2-3% of purchase price

Property Viewing Trip Planning

For overseas investors, an efficient property viewing trip is essential:

1. Pre-Trip Research:
   • Identify 10-15 potential properties before arrival
   • Schedule viewings in advance (Lithuania’s market moves quickly in prime areas)
   • Research neighborhoods thoroughly online
   • Arrange meetings with attorneys, agents, and potential property managers
2. Trip Logistics:
   • Plan at least 3-4 days per city being considered
   • Vilnius, Kaunas, and Klaipėda each warrant separate visits if considering multiple locations
   • Schedule viewings in geographical clusters
   • Leave time for neighborhood exploration and meeting with professionals
3. During Viewings:
   • Take detailed photos and notes
   • Ask about building maintenance fees and history
   • Inquire about building management and homeowners’ association
   • Check broadband speeds and mobile reception
   • Note proximity to transport, amenities, and attractions
4. Consider engaging a bilingual assistant who can:
   • Provide translation during viewings
   • Help navigate local transportation
   • Offer cultural context for neighborhoods
   • Assist with follow-up communications after your departure

Property Evaluation Criteria

Assess potential investments using these key criteria:

• Location Factors:
  • Transport links (bus/trolleybus stops, train stations)
  • Walking distance to amenities (shops, restaurants, parks)
  • School proximity and quality (important for family rentals)
  • Crime statistics for the neighborhood
  • EU-funded development areas and infrastructure projects
  • Employment centers, universities, and tech parks
• Building Quality:
  • Age and construction type (Soviet-era vs. new construction)
  • Energy efficiency rating (increasingly important for value)
  • Building materials and insulation quality (crucial for heating costs)
  • For apartments: management company reputation and maintenance
  • For houses: renovation history, roof condition, insulation
  • Heating system type (central, individual gas, geothermal)
• Rental Potential:
  • Rental yield compared to area average
  • Tenant demographics in the area (students, professionals, expats)
  • Seasonal vs. year-round rental potential
  • Potential for short-term rentals (Airbnb restrictions vary by city)
  • Furnished vs. unfurnished market dynamics
  • Potential for value-add improvements
• Financial Considerations:
  • Price per square meter compared to area average
  • Building maintenance fees (for apartments)
  • Utility costs, especially heating (varies significantly by building)
  • Property tax implications (residential vs. commercial)
  • Insurance costs
  • Potential capital appreciation based on area development

Expert Tip: In Lithuania, the building’s heating system and energy efficiency are particularly important considerations due to cold winters. Soviet-era buildings often have central heating systems with higher costs, while newer properties typically feature more efficient individual heating solutions. An “A” or “B” energy class building may command higher purchase prices but will offer significantly lower operating costs and better rentability. Pay special attention to the energy performance certificate (which is mandatory) when evaluating properties.

Legal Due Diligence

• ✓
  Title Verification: Confirm ownership through the Real Property Register (Registrų Centras)
• ✓
  Encumbrance Check: Verify any mortgages, liens, or other encumbrances
• ✓
  Land Registry Search: Confirm land ownership and usage rights
• ✓
  Building Registration: Verify all structures are properly registered and legal
• ✓
  Zoning Verification: Check property use aligned with zoning regulations
• ✓
  Environmental Checks: Identify any contamination or protected area restrictions
• ✓
  Homeowners’ Association Review: Examine bylaws, finances, and planned works
• ✓
  Heritage Status Check: Verify any cultural/historical protection limitations

Physical Due Diligence

• ✓
  Property Inspection: Commission thorough technical inspection by certified specialist
• ✓
  Building Structure Assessment: Evaluate foundations, walls, load-bearing elements
• ✓
  Energy Efficiency Certificate: Review rating and improvement recommendations
• ✓
  Heating System Evaluation: Assess condition, efficiency, and operating costs
• ✓
  Plumbing & Electrical Inspection: Check systems for safety and compliance
• ✓
  Common Areas (if applicable): Inspect maintenance, security, accessibility
• ✓
  Internet Connectivity: Test broadband speeds and provider options
• ✓
  Renovation Assessment: Obtain estimates if improvements planned

Financial Due Diligence

• ✓
  Comparative Market Analysis: Verify price aligns with recent comparable sales
• ✓
  Rental Market Research: Confirm realistic rental expectations (speak to local agents)
• ✓
  Tax Calculation: Determine transaction taxes, annual property tax, and income tax
• ✓
  Running Cost Assessment: Calculate all ownership expenses (maintenance, utilities, insurance)
• ✓
  Utility Bills History: Review past 12 months to identify seasonal variations
• ✓
  ROI Calculation: Develop detailed cash flow projections and return analysis
• ✓
  Future Expenses: Research major building works or maintenance fee increases

Expert Tip: In Lithuania, obtaining an extract from the Real Property Register (Registrų Centras) is an essential step in due diligence. This document provides the complete legal history of the property, including ownership changes, mortgages, encumbrances, and any legal disputes. The document can be obtained online, costs approximately €15-20, and provides official verification of the property’s legal status. Having your lawyer analyze this document is crucial before proceeding with any transaction.

Offer and Negotiation

1. Make an Offer: Typically submitted in writing through the real estate agent
2. Negotiation: Price, conditions, and included items discussed
3. Preliminary Agreement: Optional but common, secures the property with deposit
4. Reservation Agreement: Common for new developments, reserves specific unit

Preliminary agreements are not mandatory but provide security for both parties during the due diligence period. These agreements typically include a deposit of 5-10% of the purchase price, which is forfeited if the buyer withdraws without cause but returned if significant issues are discovered during due diligence.

Required Legal Process

1. Legal Representation: Engage a Lithuanian attorney familiar with foreign purchases
2. Due Diligence Period:
   • Property register searches
   • Title verification
   • Technical inspections
   • Legal compliance checks
3. Preparation for Closing:
   • Draft purchase agreement
   • Review by both parties’ legal representatives
   • Arrange financing if needed
   • Prepare payment mechanism
4. Notarial Deed:
   • Mandatory notarization of purchase agreement
   • Requires in-person signing or power of attorney
   • Verification of identities and contract terms
   • Payment of notary fees
5. Payment and Transfer:
   • Funds transfer typically via bank or notary escrow
   • Keys handed over as agreed (often at notary)
   • Utility account transfers arranged
6. Property Registration:
   • Registration with Real Property Register
   • Usually handled by notary or attorney
   • Official ownership transfer completed
7. Post-Registration:
   • Notification to tax authorities
   • Utility contracts transferred
   • Property insurance arranged

The timeframe from offer acceptance to completion typically ranges from 2-6 weeks, with new developments potentially taking longer if construction is ongoing. The notarial process is a crucial legal requirement in Lithuania, and the notary serves as a neutral third party ensuring the legality of the transaction.

Transaction Costs

Budget for these typical transaction expenses:

• Notary Fees:
  • 0.45% of property value but not less than €28.96 or more than €5,792.40
  • Additional fees for mortgage registration if applicable
  • Mandatory for all real estate transactions
• Registration Fee: €10-50 for property title registration
• Legal Fees: €500-1,500 for attorney representation
• Real Estate Agent Commission: 1.5-3% of property value (typically paid by seller but may be negotiated)
• State and Municipal Fees: Approximately €100-200 for various certificates and permits
• Translation Services: €200-500 for document translation if needed
• Property Valuation: €150-300 if required for mortgage or transaction
• VAT: 21% applies to new construction (first sale) but not resale properties

Total transaction costs for foreign investors typically range from 2-4% of the purchase price for resale properties, and potentially higher for new developments where VAT may apply. These costs should be factored into your overall investment calculations.

Expert Tip: For foreign buyers unable to be present in Lithuania for the transaction, a power of attorney can be arranged allowing your attorney or a trusted representative to sign documents on your behalf. This should be prepared in advance, as it requires notarization in your home country and may need to be apostilled for use in Lithuania. A properly executed power of attorney allows the entire purchase process to be completed remotely, requiring only electronic document signing and international fund transfers.

Administrative Tasks

• ✓
  Property Tax Registration: Notify the tax authorities of your ownership (typically handled by notary)
• ✓
  Utility Transfers: Set up accounts for electricity, water, gas, and heating
• ✓
  Homeowners’ Association: Register with building management for multi-unit properties
• ✓
  Insurance: Arrange building and contents insurance (often required for mortgages)
• ✓
  Building Management: Establish relationship with property administrator or management company
• ✓
  Municipal Services: Register for waste management and other municipal services
• ✓
  Tax Representation: Appoint tax representative if required for non-resident owners

Regulatory Compliance

Rental properties in Lithuania must comply with several regulations:

• Energy Performance Certificate:
  • Mandatory for all properties being sold or rented
  • Must be renewed every 10 years
  • Must be shown to prospective tenants
• Fire Safety Compliance:
  • Smoke detectors mandatory in all residential properties
  • Carbon monoxide detectors required in properties with combustion heating
  • Fire extinguisher recommended for rental properties
• Health and Safety Standards:
  • Adequate heating capacity (minimum 18°C in living areas)
  • Proper ventilation and humidity control
  • Safe electrical installations with regular checks
• Furniture and Equipment Standards:
  • Furnished rentals must provide safe, functional furniture
  • Appliances must meet EU safety standards
  • Regular maintenance and safety checks required
• Short-Term Rental Regulations:
  • Varies by municipality (Vilnius has stricter rules than other areas)
  • Some homeowners’ associations restrict short-term rentals
  • May require special registration for commercial accommodation services

Compliance with these regulations is important not only for legal operation but also for insurance coverage. Most property management companies will ensure these requirements are met as part of their service.

Record Keeping

Maintain comprehensive records for tax and legal purposes:

• Property Documents:
  • Purchase contract and notarial deed
  • Property registration documents
  • Technical passport and floor plans
  • Energy performance certificate
  • Insurance policies and claims
• Financial Records:
  • All property-related expenses with receipts
  • Mortgage statements (if applicable)
  • Utility bills and payments
  • Maintenance and repair costs
  • Homeowners’ association fees
  • Rental income and tenant deposits
• Tax Documentation:
  • Annual property tax payments
  • Income tax declarations (Lithuanian and home country)
  • Capital improvements documentation (for future capital gains calculation)
  • Depreciation schedules (if applicable)
• Tenant Information:
  • Tenancy agreements
  • Tenant identification and reference checks
  • Property inventory and condition reports
  • Inspection records
  • Correspondence regarding maintenance

Lithuanian tax authorities require records to be kept for at least 5 years. Digital record-keeping systems with secure backups are recommended, particularly for overseas investors managing properties remotely. Many property management companies offer digital document storage as part of their services.

Expert Tip: Consider registering for Lithuania’s electronic declaration system (EDS) through the State Tax Inspectorate website. This allows non-resident property owners to file tax returns and property declarations electronically from abroad. The system is available in English and eliminates the need for paper submissions. Your tax representative or property manager can assist with the initial registration process, which requires a Lithuanian electronic signature or mobile ID.

Lithuanian Tax Obligations

• Real Estate Tax:
  • 0.5-3% of property value annually for residential properties worth over €150,000
  • Rate varies by municipality and property value
  • Commercial properties taxed regardless of value
  • Due annually by October 15
• Land Tax:
  • 0.01-4% of land value annually
  • Applicable if land is owned separately from buildings
  • Rate varies by municipality
  • Due annually by November 15
• Income Tax on Rental Income:
  • 15% flat rate for non-residents
  • Option to deduct 30% of rental income as expenses without documentation
  • Alternatively, actual expenses can be deducted with proper documentation
  • Annual declaration required by May 1 of following year
• Value-Added Tax (VAT):
  • 21% VAT on new construction (first sale within 24 months of completion)
  • Generally not applicable to resale residential properties
  • Commercial property may be subject to VAT in certain circumstances
• Capital Gains Tax:
  • 15% on profit from property sale for non-residents
  • Exemption available if property was owned for more than 10 years
  • Additional exemptions for primary residences in some cases
  • Must be declared within the tax year of sale
• Inheritance and Gift Tax:
  • 5-10% depending on relationship to donor/deceased
  • Applies to Lithuanian property regardless of recipient’s residence
  • International tax treaties may provide relief

Home Country Tax Obligations

Lithuania has tax treaties with both the United States and Canada which help prevent double taxation. These treaties generally allow taxes paid in one country to be credited against tax obligations in the other, though specific provisions vary. Consultation with tax professionals familiar with both jurisdictions is strongly recommended.

Tax Planning Strategies

• Entity Structure: Evaluate whether personal ownership, Lithuanian company, or other structures optimize tax position
• Expense Documentation: Maintain detailed records of all deductible expenses to reduce taxable rental income
• Renovation Timing: Consider major renovations immediately after purchase to increase depreciable basis
• Capital Improvements: Document all capital expenditures which may reduce future capital gains tax
• Holding Period Planning: Strategic ownership timing to benefit from the 10-year capital gains exemption
• VAT Registration: Consider VAT registration for commercial properties to recover input VAT
• Tax Representative: Appoint professional tax representative to ensure compliance and optimization
• Timing of Income: Consider timing of rental income recognition for tax efficiency

Tax regulations change periodically, with Lithuania generally moving toward greater alignment with EU standards. Regular consultations with Lithuanian and home country tax professionals are essential to ensure continued compliance and optimal structuring as regulations evolve.

Expert Tip: Lithuania offers a simplified tax regime for small rental activities. If your annual rental income does not exceed €45,000, you can register for a “business certificate” (veiklos pažyma) with a fixed annual tax instead of the standard income tax. This can be particularly advantageous for properties with seasonal rentals like coastal or resort properties. The certificate can be obtained from the tax authorities and significantly reduces paperwork while potentially lowering overall tax liability.

Selecting a Property Manager

Evaluate potential property managers using these criteria:

• Experience with Foreign Investors:
  • Track record managing properties for overseas owners
  • English-language capabilities
  • Experience with tax reporting for non-residents
• Professional Credentials:
  • Membership in Lithuanian real estate associations
  • Professional certifications or qualifications
  • Professional liability insurance
• Market Knowledge:
  • Specialization in your property type/location
  • Understanding of local rental market trends
  • Established tenant relationships
• Communication Systems:
  • Online portal for remote access to reports
  • Regular updates and transparent reporting
  • Responsive to international time zones
• Maintenance Network:
  • Trusted contractors for repairs
  • Emergency response procedures
  • Preventative maintenance programs
• Tenant Management:
  • Thorough vetting and reference checks
  • Clear lease agreements and policies
  • Effective rent collection systems
• Financial Controls:
  • Segregated client accounts for tenant deposits
  • Detailed financial reporting
  • Transparent fee structure

Management Agreement Essentials

Ensure your property management contract includes these key elements:

• Scope of Services: Detailed description of exactly what is included and excluded
• Fee Structure: Clear explanation of all management fees, commissions, and additional charges
• Contract Term and Notice Period: Duration of agreement and how to terminate
• Reporting Schedule: Frequency and format of financial and property condition reports
• Maintenance Authority: Spending limits for repairs without prior approval
• Tenant Selection Criteria: Parameters for approving potential tenants
• Rent Collection Procedures: Methods, timing, and handling of arrears
• Insurance Requirements: Coverage expectations and liability boundaries
• Regulatory Compliance: Responsibility for safety certificates and compliance checks
• Dispute Resolution: Process for addressing disagreements or service issues

Professional property management is particularly valuable for foreign investors in Lithuania, as language barriers and distance can complicate direct management. A good property manager not only handles day-to-day operations but also serves as your local representative, protecting your investment and maximizing returns.

Expert Tip: Lithuania has a growing number of property technology startups offering innovative management solutions. Services like digital key exchange, remote access systems, and smart home integration can enhance property management efficiency, particularly for short-term rentals. Ask potential property managers about their technology adoption and whether they offer virtual property tours, online maintenance requests, and real-time financial dashboards. These tech-forward solutions can significantly improve your visibility and control over your investment from abroad.

Exit Options

Sale Process

When selling your Lithuanian property:

1. Pre-Sale Preparation:
   • Property presentation and staging
   • Address maintenance issues
   • Gather all relevant documentation
   • Consider vacant possession vs. tenanted sale
2. Agent Selection:
   • Local expertise in your property type
   • Marketing reach to both local and international buyers
   • Commission structure (typically 1.5-3%)
   • Exclusive vs. non-exclusive listing approach
3. Legal Preparation:
   • Update property registration if needed
   • Prepare energy performance certificate
   • Resolve any outstanding legal issues
   • Prepare power of attorney if selling remotely
4. Marketing Period:
   • Professional photography and floor plans
   • Online and offline marketing exposure
   • Viewings management (usually by agent)
   • Offer negotiation
5. Transaction Process:
   • Preliminary agreement (optional but common)
   • Buyer due diligence period
   • Notarial deed preparation
   • Final contract signing with notary
   • Funds transfer and key handover
6. Post-Sale Requirements:
   • Capital gains tax declaration if applicable
   • Currency repatriation planning
   • Utility account closures
   • Notification to tax authorities

The Lithuanian selling process typically takes 1-3 months from listing to completion, though this can vary based on market conditions, property type, and price point. The process is generally straightforward, with the notarial system providing security for both buyers and sellers.

Market Exit Timing Considerations

Several factors should influence your exit timing decision:

• Lithuanian Property Cycle: The market typically follows 7-10 year cycles; selling during upswing phases generally optimizes returns
• Currency Exchange Rates: Monitor EUR/USD or EUR/CAD trends; a strong euro significantly enhances returns when converting back to home currency
• EU Economic Conditions: Lithuanian property values are increasingly correlated with broader EU economic trends
• Capital Gains Tax Threshold: The 10-year ownership exemption provides a significant tax advantage for long-term holdings
• Regional Development: Major infrastructure projects or area regeneration can create optimal selling windows
• Seasonal Factors: Spring (April-June) and early autumn (September-October) typically see highest buyer activity
• Local Supply Dynamics: New development completions can temporarily impact resale values in specific neighborhoods
• EU Regulatory Changes: EU-wide regulations on property, energy efficiency, or taxation may impact market value

The Lithuanian property market has matured significantly since joining the EU and adopting the euro, providing more predictability for exit planning. However, its smaller size compared to major European markets means that local factors can still create significant variations in liquidity and pricing, requiring careful attention to market conditions when planning an exit.

Expert Tip: Lithuania’s capital gains tax exemption after 10 years of ownership creates a natural horizon for investment planning. Consider structuring your investment with this timeframe in mind, potentially using the first 2-3 years for value-adding renovations and optimization, followed by 7-8 years of stable rental income. This approach often maximizes total returns while providing a tax-efficient exit. If selling before the 10-year mark, consider timing your sale to coincide with a year when your other income sources are lower to reduce the overall tax impact.