How rental income from residential immovable property is taxed

When letting residential property (e.g. an apartment) in Lithuania, you have the right to choose how rental income is taxed:

• either to acquire a business license* for the lease of residential premises, without accommodation services (rural tourism services or bed and breakfast services), which is subject to a flat-rate income tax set by the municipal councils (this business license is only valid when letting residential property to natural persons); or
• pay 15%** income tax on the rental income.

Important: After 1 July 2020, you must acquire separate business licenses for each residential property leased.

*When letting residential property under a business license, rental income per calendar year may amount to EUR 45,000. Any excess above EUR 45,000 is taxed at an income tax rate of 15% as rental income from property without a business license.

**Income received in Lithuania which is subject to tax: interest, royalties, rental income from immovable property located in Lithuania, income from sporting and performing arts activities, income from the sale/other transfer of ownership of immovable property located in Lithuania and movable property subject to legal registration in Lithuania. If the amount of such income does not exceed 120 average national wages per year (hereinafter referred to as “ANW”) (120 ANWs in 2024 amounted to EUR 228,324; 120 ANWs in 2023 amounted to EUR 202,188; 120 ANWs in 2022 amounted to EUR 180,492; 120 ANWs in 2021 amounted to EUR 162,324; 120 ANWs in 2020 amounted to EUR 148,968), then it is taxed at an income tax rate of 15%; and if it exceeds 120 ANWs, then the part in excess is taxed at an income tax rate of 20%.