From 2025, the annual increase in land tax will be subject to a uniform national ceiling of up to 50 percent, and €20 in the case when the 50 percent increase in the amount of land tax is less than €20.

From 2026 onwards, local governments will be able to set their own limit for the annual increase in land tax, ranging from ten to one hundred percent. Land tax cannot exceed the amount of the land tax calculated on the basis of the taxable value of the land and the land tax rate.

According to the Act, the nationwide area-based tax relief for land under homes will be abolished from 2026, but local governments will be able to decide on the size of the amount-based tax relief for land under homes. The relief may be up to a thousand euro and land tax will have to be paid for the part exceeding the tax relief. A higher land tax can be paid in two installments: by March 31 and October 1. The Act increases the amount of the first payment from €64 to €100.

From 2025 the maximum tax rate on residential land and land parcels located within yards on profit yielding land will be increased from 0.5 percent to 1 percent of the taxable value of the land. The maximum rate of land tax on "other land", such as commercial land, production land and transport land, will also be increased from 1 percent to 2 percent of the taxable value of the land.

In addition, the Act makes a specification that land in state ownership with intended purpose of public construction works land will be exempt from tax only if the land is used by a state agency or local government agency.

Land tax is currently the only property tax in Estonia that has remained at the same level since 2012.

The Riigikogu passed the amendments on June 19.

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