The municipality changes land rents

I prefer to enter into a lease agreement

The director of administration first of all emphasized that nothing has changed for those tenants of state land who rented it by auction. When concluding contracts with them, they indicate the rental price with which the auction was won.

Substantial changes will affect those users of state land who have not entered into state land lease contracts.

The city council adopted a decision to introduce a differentiated tax of 1 to 4 percent for owners of private housing estates, garage construction and operation associations, and owners of garage buildings for the use of land plots without lease agreements. They will be subject to a rate of 1 percent of the land value from 2025, 3 percent from 2026, and a maximum rate of 4 percent from 2027.

A. Bartulis drew attention to the fact that garage associations use the old preferential rate of 0.47 percent, as a rent of 0.81 percent would be applied upon concluding a land lease agreement. Garage associations deliberately did not enter into contracts. In order to change the situation, from 2025, a tax of 1 percent of the land value will be charged to garage associations that have not signed state land lease contracts. It is believed that such a change will encourage garage associations to enter into lease agreements.

“We want to be the real owners of the land and settle the relationship. The council made a decision that it is more favorable to have a lease than not to have one,” said A. Bartulis.

Exceptions for investors

The head of the administration emphasized that the fundamental change affects legal entities. If a legal entity uses state land without concluding a lease agreement, it is subject to a maximum tax of 4 percent of the value of the plot. The new Council decision provides for exceptions.

If a legal entity received permission to temporarily use state land during construction and the National Land Service did not conclude a contract due to the temporary nature, a rate of 4 percent of the land’s value was applied. According to A. Bartulis, this is not fair to investors. From now on, such companies will pay only 0.5 percent of the land value – for them, the land rent is reduced by 8 times.

Another group will be affected by the changes. Legal entities that have received approvals to build simple temporary structures. Land below them will also be subject to a 0.5 percent rate.

Gardening associations are left with a 0.1 percent land rental rate.

Legal entities that do not fall into any of the mentioned groups and have not entered into contracts will continue to pay a maximum rate of 4 percent of the land value. However, if the company has concluded a lease agreement, but the leased land is abandoned, included in the list of unused land plots, a 4 percent rate will be applied to it.

“We strongly invite legal entities that have state land, but do not manage it, to take care of it and or terminate the lease agreement and thus avoid the maximum tariff”, invited A. Bartulis.

Starting this year, the rent rate for all tenants of state land who have signed contracts will change minimally – from 0.81 to 0.8 percent.

Changes to the budget will not bring more funds

The Department of Economy and Investments of the Municipal Administration informed that in 2023, 2,834 payers paid state land rent in Šiauliai, of which 2,263 had lease agreements, and 386 remained users of state land. During the year, 1,071,000 euros were added to the rental tax, and 860,000 euros were collected in the budget.

Specialists of the department calculate that there will not be a big financial change after changing the tariffs. Assuming that the tax rate will be increased from 0.47 to 1 percent for all 386 users of state land plots in 2025, about 24 thousand euros more can be collected in the Municipality’s budget. However, after the tax is reduced from 0.81 to 0.8 percent for 2,228 tenants of state-owned land, the change in collected funds will be insignificant.