The Lithuanian Free Market Institute has examined draft amendments to Article 7 of the Law on Immovable Property Tax no X-233 and submitted its comments and proposals to relevant authorities. The draft law is aimed at decreasing the value of immovable property subject to immovable property tax from 220 thousand euro to 150 thousand euro.
In its position paper, the Lithuanian Free Market Institute calls for the rejection of the draft and a thorough assessment of the possibilities of abolishing immovable property tax due to the following:
- the proposed regulation would increase the tax burden;
- the need for reducing the value subject to immovable property tax is not justified;
- there is a need to evaluate the potential increase in tax revenue as well as the costs for tax collection;
- owners of high-value property are not necessarily able to pay the tax, because property does not always reflect the income of an individual;
- unlike in Lithuania, in many countries that apply immovable property tax interest paid on immovable property may be deducted from the taxable amount.
The full position paper (in Lithuanian) is available here.