The most detailed tax guide to Estonia for 2026
Land tax, rental income and property sale: current rules, allowances, expenses and calculators for individuals in Estonia.
Land tax
Estonian land tax is calculated not from the market price of the flat or house, but from the taxable value of the land plot.
The amount of tax depends on: the municipality, the purpose of the land, the taxable value of the land, the local rate, the cap on tax growth, and any available allowances.
Land under a main residence was fully exempt from land tax: up to 1,500 m² in a town or borough, up to 2 hectares outside dense settlement areas.
The allowance is no longer tied to plot size. Instead of an exemption based on area, the municipality itself sets a monetary discount for the homeowner — from 0 to 1,000 € per property.
Check your eligibility for the allowance
All three conditions must be met as of 1 January:
Tax on rental income
Rent is taxable income. Utility and other related costs that the tenant pays under the contract or reimburses to you are not included in rental income. These include, for example, utilities, building management fees, the repair fund and other apartment association charges.
When renting out a residential property, the law automatically reduces taxable rental income by 20%. This portion is considered to cover the owner’s normal costs of maintaining and renovating the home. There is nothing separate to declare or prove with receipts: the deduction is applied automatically when filing the return.
As a private individual, you cannot separately reduce rental income by the cost of a sofa, furniture, renovation or other improvements. Instead of accounting for each expense, the law provides for a fixed deduction — 20% of the rent.
Good to know
- The 20% deduction applies only to income from renting out residential premises.
- It does not apply to short-term rentals or listings via Airbnb/Booking.
- The owner’s loan payments and land tax are not utility costs. If the tenant pays these on the owner’s behalf, that amount is treated as the owner’s income.
- Utility payments are not included in the “Rent” field in the calculator below.
Tax rate for 2026: 22%. The 20% deduction is applied automatically.
Tax on property sale
If a property is sold for more than it was bought, income tax of 22% (2026) must be paid on the profit.
Which costs reduce the taxable profit
Only documented costs directly related to the purchase, improvement or sale of the property can be deducted from the sale price.
Can be counted
- The purchase price
- Notary costs and the state fee on purchase and sale
- Agent’s commission
- The cost of a valuation report
- Costs of renovation, repairs and built-in furniture
- Other documented costs without which the deal would not have taken place
Cannot be counted
- Utility payments
- Building management fees
- Electricity and other ordinary running costs of ownership
Examples of documented costs
- Agreement with the agent and the certificate of services rendered
- Invoices for renovation, building materials, built-in furniture
- Notary invoice and state fee receipt
- Property valuation report
Main residence sale allowance and the two-year rule
Profit from a sale may be exempt from tax if the property was your actual place of residence before the sale. Registration of residence alone is not decisive — what matters is the actual fact of living there. The allowance can only be applied to one home sale within two years.
The two years are counted not from the date the contract is signed at the notary, but from the day following the date the previous transaction was entered in the Kinnistusraamat.
Costs of buying and selling
In addition to income tax, a property transaction includes two mandatory cost items that are worth budgeting for in advance.
State fee (Riigilõiv)
For registering changes in the Kinnistusraamat. Depends on the amount and type of transaction.
Notary costs (Notaritasu)
For formalising the purchase-sale transaction. Depends on the amount, the type of property and any additional actions.
By default, both fees are split by the party in whose interest the action is carried out — unless the parties agree otherwise.
An exact calculation for your transaction
My calculator works out the state fee, notary costs and the full transaction total, turnkey.
Calculate the costs of your transaction →Sources
The links lead to official Estonian resources — it’s best to verify the current rates and calculators there before making decisions.
Not sure how this applies to your situation?
Every transaction is different — the tax calculation depends on the date of the deal, place of residence and type of property. Let’s go over your situation in a consultation.