The Tallinn City Government has submitted a draft resolution to the City Council aimed at mitigating the impact of the 2025 land tax increase on property owners in Tallinn compared to 2024. The compensation is a one-time measure designed to cover the tax increase for 2025.
Deputy Mayor Karl Sander Kase stated: “Our preference would have been for the Parliament to reverse the decision on the land tax increase, but that did not happen. Therefore, we have developed an alternative solution to prevent excessive burdens on Tallinn residents during a time when all taxes are rising.”
According to the proposed resolution, both individuals and legal entities who own land in Tallinn and were land owners on January 1, 2024, and January 1, 2025, will be eligible to apply. For individuals, the applicant’s registered residence must be in Tallinn according to the population registry. The compensation will not be available to state or municipal institutions. Property owners also include holders of building rights and usufruct rights, who are taxpayers under the Land Tax Act.
For individuals, the 2025 land tax increase will be fully compensated compared to the tax paid in 2024, with no upper limit on the amount of compensation. For legal entities, the 2025 tax increase will also be compensated, but the maximum compensation amount is capped at €1,000, regardless of the number of properties owned. Compensation will not be paid if the tax increase is less than €5.
This measure aims to reduce the burden of the land tax increase and support land owners, providing them with a smoother adjustment to the tax hike. The land tax rate is 0.5% for residential and agricultural land, and 1% for other types of land, calculated annually on the taxable value of the land. Homeowners in Tallinn are exempt from land tax on up to 1,500 square meters of residential land.
The draft resolution, titled “Procedure for Granting Compensation for Land Tax Increase,” must be approved by the Tallinn City Council. More detailed information about the application process will be made available on Tallinn’s website after the City Council’s decision.
Source: tallinn.ee