State pays half-a-million euros in first Nursipalu real estate deal

Approach to the Nursipalu training area.
Approach to the Nursipalu training area. Source: Mirjam Mõttus/ERR

The Estonian Center for Defense Investments (RKIK) has carried out its first compulsory purchase of a property inside an area earmarked for an expanded military training zone in South Estonia. The transaction, with all compensation factored in, turned out to be multiple times the market rate for an equivalent property elsewhere, ERR reports.

The existing Nursipalu military training zone in Võru County is set to be tripled in size from its current approximately 3,000ha area, and as a result just over 20 properties inside the expansion zone are to be subject to a compulsory purchase.

The first purchase has now been made in respect of a residential building, and was valued at close to half-a-million euros, reportedly nearly five times the market value for properties of that type more generally.

Nursipalu training ground. Source: ERR/ Datawrapper

Nursipalu is located within a sparsely populated rural area, and the affected properties are mostly farmsteads and similar, and so incorporate both residential and non-residential buildings, and the land on which they are situated.

Commenting on the development, Minister of Defense Hanno Pevkur (Reform) said: "We have reached an agreement between the state [and the property owners] and are highly grateful to the family for reaching this purchase deal."

"This was certainly not an easy decision, but it is all the more important to know that it is a vital decision from the point of view of strengthening national defense, since the expansion of the Nursipalu training ground will contribute to bolstering the defense capability of the whole of Estonia," the minister went on.

By way of additional compensation in respect of reaching the agreement w8itht he state in acquiring the property incorporates a 20 percent incentive fee plus a 10 percent bonus applied to residential buildings. 

Sales of real estate to the Estonian state additionally brings with it a capital gains tax exemption.

"While the is no way we can emotionally compensate for the value of a homestead, we can do all we can to ensure the transition to a new living arrangement goes as smoothly as possible, and recreated a situation close as possible t that which existed before the transaction," the minister went on.

Compensation and remuneration in respect of the forced sale of Nursipalu properties is determined on a case-by-case basis during evaluation, while the extent to which the compensation ultimately exceeds market value will also be determined separately for each property.

When news of the forced property sales appeared earlier this year, the defense ministry said at the time that property owners would be remunerated at above market rates.

The minister suggested that this model might be reapplied, in the case of national defense interests.

"We are ready to spend time and energy on finding a suitable solution with other property owners also. Over the past 20 years, hundreds of property transfers have taken place in the course of national defense development, with agreement being met in almost every case," the Minister of Defense added.

In addition to the properties inside the earmarked expansion zone, compensation totaling €10 million is being paid to the four local municipalities affected by the development – Võru Rural Municipality, Võru City, Antsla Rural Municipality and Rõuge Rural Municipality.

The expanded Nursipalu zone will accommodate Estonian Defense Forces (EDF) and Defense League (Kaitseliit) training activities and the newer weaponry which has been acquired in recent years – such as the K9 "Thunder" self-propelled howitzer – as well as personnel and equipment belonging to NATO allies, including the U.S.


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Editor: Andrew Whyte

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