Lithuania Land Rights

Natural persons and enterprises, irrespective of their nationality, are entitled to hold ownership, lease or usage rights in respect of buildings and other real estate in compliance with Lithuanian law. Ownership of land by all foreigners and enterprises, including those with invested foreign capital, is now limited and previously was expressly forbidden by Constitution of Republic of Lithuania. On June 20, 1996 Constitution was supplemented with provision establishing that municipalities, other national subjects, including enterprises - legal entities, as well as foreign entities engaged in economic activities in Lithuania and complying with certain criteria, set by Constitutional Law, may be allowed to acquire ownership of nonagricultural land plots. Procedure for filing notices and issuance of permits for acquisition of ownership of land by national and foreign persons was established by Resolution No. 1423 of Government of Republic of Lithuania (adopted on Dec. 10, 1998, am'd on Feb. 6, 2001).

Law on Amending of Art. 47 of Constitution (adopted on Jan. 23, 2003) cancelled earlier constitutional provision that land for agricultural use, internal waters and forests can be owned only by citizens of Republic of Lithuania and State. According to subsequent amendments of Constitutional Law (adopted on June 20, 1996, am'd on Mar. 20, 2003) foreign entities that meet criteria of European and Transatlantic Integration could acquire ownership of land plots, internal waters and forests subject to same conditions and procedure as citizens and entities of Republic of Lithuania from date of Lithuania's accession to EU. Seven-year transitional period is established for acquisition of land for agricultural and forestry use with exception for foreign citizens that have been residing and engaged in agricultural activities in Lithuania for three years and foreign entities that have established subsidiaries or affiliates in Lithuania. Prior to Lithuania's accession to EU, foreign entities that meet criteria of European and Transatlantic Integration may not directly acquire land plots for agricultural use, forests for forestry use, land in free economic zones, etc.

Agreements for sales of real property must be certified by public notary and for such agreement to be applicable against third persons it must be registered with Real Estate Register.

Lease of land is governed by CK. Agreement on lease of real property term of which extends beyond one year must be in written form. It also has to be registered with Real Estate Register to be applicable against third persons. Lessee's rights to use part of land plot buildings (structures) where leasehold is located are automatically secured by agreement on lease of buildings (structures). Maximum term of lease agreements of state owned land is set at 99 years. Term of lease of private land may be freely agreed by parties. State owned land is leased through public auctions, except for land plots which have buildings (structures) held by ownership title by natural or legal persons located on them. State owned land plots are leased to persons offering highest price, and rent for privately owned land plots is negotiated by parties to land plot lease agreements. Agreements on sublease of whole or part of land plot may be concluded upon receipt of permission from lessor.

Law "On Real Estate Register" (adopted on June 21, 2001) came into force on July 1, 2001. Law regulates registration of ownership and other rights to real property, except mortgages, and restrictions thereon. Law also establishes order of registration of said rights, legal facts and changes thereto. (Martindale Hubbell International Law Digest Property Lithuania)

Private property was reintroduced in Lithuania in 1990. The Constitution of Lithuania and the law on foreign capital investment protect all forms of private property. According to the Constitution foreigners are allowed to buy non-agricultural land and plans are underway by the Lithuanian Parliament to make amendments to the Constitution Article 47 to allow sale of agricultural land to foreigners.

Lithuania Real Estate Info Summary

Property Taxes:

Law On Real Property Tax of Enterprises and Organizations (adopted on July 20, 1994, am'd on Mar. 28, 1996; Apr. 30, 1996; July 4, 1996; June 17, 1997; Oct. 17, 2000; July 10, 2001). Object of taxation is immovable property (excluding land, aircraft and ships) located in territory of Republic of Lithuania and owned by legal persons and foreign legal persons and organisations. Annual tax rate is 1 of taxable value of real property which is deemed replacement value of property (while calculating percentage of physical depreciation), having applied local correction coefficients set forth by resolutions of Commission under Ministry of Finance for evaluation of property which requires registration. Tax is calculated by payers of tax according to taxable value of property established by territorial branches of State Enterprise of Land and Other Real Estate Cadastre and Register (evaluation is valid for five years). Tax is paid by installments each quarter.

Law On Land Tax (adopted on June 25, 1992, am'd on Apr. 6, 1995; June 13, 1995; July 3, 1995; Apr. 30, 1996). Land ownership is taxed at annual rate of 1.5 of land value. Amount of tax is calculated by tax inspectorates, except legal entities who calculate tax themselves.

Lithuania Mortgages & Financing

Objects registered with public register, not withdrawn from civil circulation and eligible to be sold at public auctions may be subject to mortgage. Only insured objects, except for land plots, can be mortgaged. If building (structure) is mortgaged, land plot real estate is located at or right of lease (gratuitous lease) thereof has to be mortgaged as well. Title of ownership to mortgaged object is subject to transfer whereupon mortgage stays attached to said object. Only owner of property may be mortgagor. Mortgage is established by agreement between creditor and debtor, by unilateral statement of debtor's request to register involuntary mortgage and only upon due registration thereof with Mortgage Register. When mortgaging land buildings situated thereon are mortgaged as pertinents thereto, unless mortgage agreement provides otherwise. Mortgage of real estate does not include proceeds therefrom. Mortgage of following types may be established: involuntary and contractual. Latter is further divided into ordinary, joint, third party's assets, maximal, common and conditional. Law or decision of court provides for establishment of involuntary mortgage which is subject to preconditions set out in CK.

Mortgage is executed by filling in mortgage bond approved by public notary, in case of contractual mortgage, and registering it with mortgage departments at district courts. Data on mortgage are transferred to Central Mortgage Register by electronic data transfer. Claim secured by mortgage may be assigned, unless mortgage agreement provides otherwise, by endorsement in mortgage bond, assignment to be registered with Mortgage Register. Changes are subject to same order of registration as mortgage bond itself. Claim secured by mortgage may also be subject of pledge for securing repayment of loan, also to be registered with Mortgage Register.

If debtor fails to discharge obligation or, in certain cases provided by law, when creditor has right to demand that its claim be satisfied prior to expiration of maturity date, creditor must give mortgage judge enforcement request. Mortgage judge within three days rules on seizure of collateral and gives debtor one month for discharge of obligation. If debtor fails to discharge obligation, collateral is sold by bailiff at auction in accordance with procedure established by Code of Civil Procedure. If collateral is not sold through auction or transferred to creditor's ownership, it may be assigned to creditor for administration, which does not exclude right to demand repeated sale at auction.