High-Return Property Investments in KaunasReal estate near galleriescampuses, and rivers

Real Estate in Kaunas, Lithuania

Why Consider Property Investment in Kaunas

Kaunas, Lithuania’s second-largest city, is a rising star in the Baltic real estate market. Known for its dynamic student population, rich interwar architecture, and strong manufacturing base, Kaunas offers excellent investment opportunities for both residential and commercial buyers. With direct access to the European highway system, proximity to Vilnius and the Baltic Sea, and ongoing infrastructure development (including Rail Baltica), Kaunas is experiencing rapid urban growth. Property in Kaunas remains more affordable than in Vilnius, yet the rental and appreciation potential are steadily rising.

Types of Property Available in Kaunas

The real estate landscape in Kaunas is diverse and caters to a broad range of investor profiles:

• Historic interwar apartments — Located in the city center (Centras, Žaliakalnis), many are architecturally unique and in high demand for restoration or boutique rentals.
• New developments — Projects in districts like Aleksotas and Šilainiai are offering modern amenities and competitive pricing.
• Single-family houses — Found in suburban areas such as Romainiai and Karmėlava; ideal for families or long-term investors.
• Student housing — With universities like Vytautas Magnus and Kaunas University of Technology, there's a constant demand for rental units near campuses.
• Commercial properties — Office buildings, logistics centers, and retail spaces are in demand due to the city’s industrial and tech sectors.

Legal Framework for Foreign Buyers

Lithuania offers one of the most investor-friendly real estate regimes in the EU:

• Foreigners can freely purchase real estate — Both residential and commercial, with no citizenship or residency requirement.
• Direct ownership — Allowed for individuals and companies without restrictions.
• Secure land registry — Managed by Registrų centras (National Property Register) ensuring title protection.
• Bank loans available — Primarily for EU residents; non-EU buyers typically invest using cash or local legal entities.
• Rental income and capital gains — Are taxed fairly and transparently under EU law.

The clear legal framework makes Lithuania, and Kaunas in particular, an appealing choice for international investors.

Property Prices and Market Trends

Kaunas remains significantly more affordable than Vilnius or Tallinn, while offering similar growth potential:

• City center apartments: €1,800 – €2,700 per m²
• New builds (Aleksotas, Dainava): €1,700 – €2,500 per m²
• Historic apartments (Žaliakalnis): €2,000 – €3,200 per m² for restored properties
• Suburban houses: €1,300 – €2,300 per m² depending on location and land size
• Commercial properties: €6 – €12 per m²/month for office rentals; purchase prices vary widely by zone

Prices in Kaunas have been rising steadily (4%–8% annually), with further appreciation expected due to urban expansion and infrastructure investment.

Rental Yields and Investment Scenarios

Kaunas offers attractive rental returns, particularly in zones close to universities, industrial parks, and the historical center:

• Long-term residential yield: 5%–7% net annually
• Student housing yield: Up to 9% for small studios or shared flats near universities
• Short-term Airbnb yield: 8%–10% in high-traffic zones like Old Town or Laisvės Alėja
• Commercial yields: 6%–8% depending on tenant quality and location

Example: A 45 m² apartment near Vytautas Magnus University purchased for €90,000 can rent for €500/month long-term or €40–60/night on Airbnb, generating gross yields of 6%–9%.

Best Neighborhoods for Investment

Kaunas is composed of varied districts, each suited to different investment strategies:

• Centras (City Center) — Historic buildings, high foot traffic, ideal for Airbnb and high-end restorations.
• Žaliakalnis — Prestigious neighborhood with interwar villas, green spaces, and proximity to city landmarks.
• Aleksotas — Rapidly growing, with new developments and excellent transport links to the airport and highway.
• Dainava — Popular with students and young professionals due to its mix of affordability and location.
• Šilainiai — Known for new apartment blocks and family-friendly infrastructure.
• Romainiai and Karmėlava — Ideal for houses and long-term investments in quiet, suburban environments.

Taxes and Transaction Costs

Lithuania’s taxation system is straightforward and investor-friendly:

• Stamp duty: 0.5%–2% of property value
• Notary and registry fees: €300–€800 depending on transaction size
• Annual property tax: Usually 0% for residential owners; commercial or luxury properties may face 0.3%–3%
• Rental income tax: 15% for non-residents (flat rate)
• Capital gains tax: 15% if sold within 10 years (exempt after 10 years or on primary residence)

There are no hidden or excessive charges, making Kaunas especially welcoming for overseas buyers.

Who Should Buy Property in Kaunas

Kaunas is a strategic choice for:

• Buy-to-let landlords — Consistent demand from students, professionals, and families ensures stable occupancy.
• Short-term rental hosts — Cultural events, academic programs, and growing tourism support high Airbnb turnover.
• First-time foreign investors — Transparent legal system and low entry costs reduce barriers to entry.
• Developers — Strong construction sector and growing demand create opportunities for small-to-medium residential projects.
• Commercial buyers — Demand for retail and logistics continues to rise due to Lithuania’s growing export economy.

The city’s combination of affordability, demand, and location makes it ideal for diversified real estate portfolios.

Conclusion

Kaunas is one of the most dynamic real estate markets in the Baltics. With competitive prices, solid rental yields, and a strong economy driven by education, logistics, and technology, it presents a compelling case for investors seeking long-term value in Northern Europe. As infrastructure projects like Rail Baltica and the reconstruction of Kaunas airport continue, real estate demand is poised to rise further. For foreign buyers, the legal clarity and low acquisition costs make entering the market both simple and secure.