Vilnius will not collect an infrastructure development levy from developers of social purpose buildings

The Vilnius City Council approved new provisions for the infrastructure development levy –builders and developers of real estate will be exempted from paying the levy when the building which they build is of public use, i.e. it meets the criteria for social infrastructure, but is funded with other than municipal funds. This means that the exemption from the infrastructure development levy would apply to private developers for the construction of public libraries, museums, schools, kindergartens, hospitals, clinics, sports halls, stadiums and other sports facilities. To qualify for the exemption, the developer will have to commit to not changing the purpose of the object for five years.

The changes to the payment procedure also follow the findings of an evaluation by the Special Investigation Service, which recommended clarifying when the exemption from the infrastructure development levy applies.

The City of Vilnius has continued cooperating with developers on the development of various infrastructure important to the city until now. In accordance with legislative procedure, accrued funds can be used to reimburse a developer for priority municipal infrastructure built at its own expense. In this case, the difference between the levy calculated on the basis of the floor area of the building and the value of the infrastructure installed would be reimbursed.

Just like in other fast-growing cities around the world, the infrastructure development levy was introduced in order to ensure that public infrastructure is accessible to the population. Its installation and maintenances are more expensive and complicated in areas away from established city centres. As a result, different levy rates apply in different parts of the city: €30 per square meter (sqm) is charged in priority zones and €50/sqm – in non-priority zones. The preferential contribution rate of €15/sqm applies to single-family houses, when it is the only residential building on a land plot, regardless of the priority zone.

In 2021, the City of Vilnius collected almost €6.6 million in levies and more than €9.8 million – in 2022. The funds were used for the construction of the nursery kindergarten “Bajorėlis”, the Pilaitė Gymnasium, the extension of the Jerusalem Pro-Gymnasium, as well as for the construction and reconstruction of streets and the installation of public transport lanes in 2022.

For more information on the infrastructure development levy, see https://bit.ly/3YBqiKv.