City of Tallinn to confirm new land tax rates by July 2023
For the first time in 21 years, the Land Board has conducted a mass land valuation, with the aim of providing Tallinn landowners with objective and up-to-date information about the market value of their land. The results of the 2022 valuation will be used to inform government decisions related to taxation from 2024 onwards, however land tax will not increase by more than 10 percent per year.
Tallinn Deputy Mayor Tanel Kiik (Center) said, that due to the length of time since the last land valuation was carried out, the value of land has increased significantly.
"In addition to updating the market price (of land plots), this time, plot valuations have also been adjusted. Whereas during previous land valuations, price zones were established, on the basis of which, land prices were then calculated separately for each plot, this time each plot's value was calculated straight away," said Kiik.
The mass land valuation was carried out by the Land Board in cooperation with professional real estate valuing companies to determine the approximate market value, or tax value, of all land plots in Estonia.
The new valuations were reached by considering existing transaction prices, along with the specific characteristics of the plots being valued, and will be available to all interested parties on the Land Registry's website from October 31.
According to the City of Tallinn, all landowners need to do is check the accuracy of information related to their land in the online database and provide feedback to the Land Registry in the event of any errors.
The results of the 2022 mass valuation will also be used as a basis to inform land taxation, but only from 2024 onwards. "This means, that in 2023, land tax will be calculated on the basis of the current assessment prices, with the new assessment prices not yet having an impact," explained Kiik.
"For the City of Tallinn, it is important that land tax remains affordable for people in the years to come. In order to avoid a huge rise in land tax, maximum rates have been lowered up to 5 times (in value) by law. An additional restriction has been put in place to ensure land tax cannot increase by more than 10 percent per year. Homeowner benefits will also remain in place, with those who own homes up to a maximum size of 1500 meters squared in Tallinn continuing to be exempt from land tax," said Kiik.
The City of Tallinn will confirm the new land tax rates by July 1, 2023 at the latest.
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Editor: Michael Cole