From January 1, 2026, a standard 21% VAT rate will apply to this heat energy.
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Experts predict that this heating season heat prices in Lithuania will rise significantly due to rising gas prices and a shortage of biofuel, with the expected price increase possibly reaching up to 30%, and due to rising raw material prices, those heating with electricity will also feel the increase, with its price possibly being the second highest in history.
“People will face more expensive heating and an increasing tax burden this heating season. Therefore, we propose to restore the 9% VAT rate specifically for heat energy. This is not a proposal to change other VAT rates. This specific bill aims to reduce essential household expenses at a time when energy prices directly affect household budgets,” said Member of Parliament A. Anušauskas.
The Lithuanian Energy Agency (LEA) stated in its January 2026 review that increasing the VAT rate from 9% to 21% caused the heating bill to rise on average by about 5 euros in renovated and about 10 euros in non-renovated apartment buildings.
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“The state has the opportunity to reduce part of the tax burden precisely where it is most felt – in essential household expenses. A lower VAT would mean a lower final heating bill and could also reduce the need for heating compensation. According to public information, 30 thousand people have already applied for such compensation in two weeks, 4 thousand more than at the same time last year,” explained A. Anušauskas, outlining the motives for submitting the bill amendments.
According to data from the Lithuanian Energy Agency (LEA), in September 2026 the average price of centrally supplied heat was 8.07 ct/kWh excluding VAT, compared to 6.33 ct/kWh a year earlier – a 27.5% increase.
The State Data Agency has also indicated that the increase in heat energy prices was among the significant factors increasing annual inflation.
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