Since 2025, many property owners have been closely monitoring changes related to real estate tax. And not without reason, as significant changes are approaching in Lithuania that will affect both individuals and legal entities. At the same time, the question arises – is it worth investing in building reconstruction if it can increase not only the property’s value but also the tax burden?
In this article, we will discuss how modernization can affect real estate tax, whether it is financially viable in the long term, and what design solutions offered by Arqiplan can enhance energy efficiency and functionality.
What is real estate tax and what changes from 2025?
Currently, real estate tax for individuals is applied only when the value of residential property exceeds a certain threshold – usually 150,000–220,000 euros, depending on family composition and property purpose. The tax rate ranges from 0.5% to 2%, but is calculated only on the value exceeding the set threshold.
However, from January 1, 2026, a new universal real estate tax will come into effect , which will be relevant even to those who previously did not pay it. The tax will need to be paid for the first time in 2027 for the year 2026.
What will change?
- The current tax-free value, applied only to the main residence (~50,000 € tax-free portion), will be abolished.
- Many more residents will pay the tax, as progressive rates will be applied: from 0.05% to 1%, depending on property value and municipal decision.
- Municipalities will be able to set rates up to 3% for commercial property.
More information about these changes can be found here.
Want to calculate a preliminary tax? You can use this convenient real estate tax calculator.
How does building reconstruction affect real estate tax?
When reconstructing or modernizing a building, its value inevitably increases, especially if energy efficiency is improved, infrastructure is updated, or the purpose is changed. Higher value means a higher real estate tax – especially when taxes will be calculated on the entire value, not just its excess portion.
Does this mean that investing is not worthwhile?
Certainly not. Although real estate tax for individuals may increase, it’s worth considering the long-term benefits:
- Property value increases – both in the market and rental income potential.
- Modernized real estate requires lower heating and maintenance costs.
- Such property becomes more attractive to buyers or tenants, so the return often outweighs the tax increase.
For example, a flat worth 120,000 € renovated for 30,000 € can increase in value to 180,000 €. If the tax is applied at a 0.1% rate, it would mean 180 € per year – a small amount compared to the additional benefits.
How to effectively increase property value? Arqiplan solutions
If you are considering reconstruction, it is important to choose reliable partners. Arqiplan – a team of professionals offering modern and sustainable design solutions that help increase not only aesthetic but also functional and commercial value of buildings.
What does Arqiplan offer?
- Increasing energy efficiency: insulation, A++ class solutions, ensuring airtightness.
- Improving functionality: space reconfiguration, change of purpose, light optimization.
- Sustainable architecture: focused on long-term use, low operating costs, and ecology.
Thanks to such solutions, it is possible to achieve significant property value growth, which pays off over time even with increased real estate tax.
Conclusion: is it worth reconstructing if real estate tax will increase?
If we look only at the annual real estate tax – yes, reconstruction can increase it. However, if we view real estate as a long-term investment, then:
- Value growth, rental/sale return, and energy efficiency often bring significantly more benefits than the additional tax.
- Wisely planned reconstruction, such as offered by Arqiplan, allows you to exploit the full potential of the property.
- Using the real estate tax calculator, you can realistically assess how changes will affect your finances – an important step before making decisions.
In short – yes, it is worth investing. But only if decisions are made wisely and implemented with quality.