Tallinn will lower its land tax rate from 2.5 percent to 0.5 percent for next year. The city is set to take a hit to its income even though it is the maximum tax rate permitted.
The tax rate will be 0.5 percent of the taxable value of land for residential and agricultural land and 1 percent for other types of land. Tallinn homeowners will not have to pay tax for up to 1,500 square meters of residential land. Homeowners whose property is on land that has several registered uses will also qualify for the exemption from this year.
This concerns around 25,300 homeowners in Tallinn, with the additional exemption to cost the city €248,000 in 2024.
The taxable value of land changed all over Estonia as a result of the regular land valuation of 2022, with the price of land going up 6.8 times on average from the last valuation in 2001.
To avoid a situation where landowners would have to pay many times what they did previously, the maximum tax rate was reduced from 2.5 percent to 0.5 percent for residential and agricultural land and 1 percent for other types of land.
Forecasts put Tallinn's land tax receipt for 2024 at €25.1 million, down €300,000 from this year.
Editor: Marcus Turovski