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Vilnius authorities are intent on cracking down on unaccounted property rents. Under a new proposal, brokers will have to register and share information about their contracts with landlords.

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Vilnius to crack down on landlords who don't pay taxes
© DELFI / Mindaugas Ažušilis

Deputy Mayor of Vilnius Gintautas Paluckas says he has drafted legislation to that effect that he is going to propose to the government.

He says that about 32,000 apartments are rented out in the Lithuanian capital each year. The total turnover can be €163 million.

If landlords paid their taxes, state coffers could supplemented with up to €17 million a year.

About 70% of the apartment rent market is managed by real estate agencies, Paluckas says. Therefore one of the measures to tackle tax evasion is to introduce a central registry for real estate brokers. They would also be obliged to share information about lease contracts with the State Tax Inspectorate.

Dmirtirjus Semionovas, the director of the real estate agency Capital, says he welcomes the proposal.

"We have been encouraging that for years - all brokers must pass exams, then there are annual attestations, you won't be able to work without a licence," he says.

The new rules would also bring in more transparency into the market, he believes.

Paluckas says that the point of his proposal is to make landlords pay their taxes on revenue from rents.

"We have been talking about the black market for years, but haven't done anything we can thanks to modern technologies," he says.

In 2015, over 48,000 people declared €117 million in revenue from property rent, according to the State Tax Inspectorate.

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