Tax on selling property in Estonia: when income tax applies, how much and how to declare it

Do you pay tax when selling property in Estonia?

Usually yes, but only on the gain. Section 15(1) of the Income Tax Act (Tulumaksuseadus, TuMS; there is an official English translation) taxes the gain (kasu) from selling or exchanging any asset, real estate included. There is no separate capital gains tax: it is ordinary income tax, tulumaks, and for gains made in 2026 the rate is the general 22% (§ 4(1) TuMS).

What is taxed is not the price but the difference between what you receive and what the property cost you, minus the costs of selling. Some sales are tax-free, most commonly the sale of the home you live in. The Estonian Tax and Customs Board (EMTA) explains the rules in English on its page on the transfer of immovable property.

When is the sale tax-free? The § 15 exemptions

The exemptions relevant to a property sale are in § 15(4) to (6) TuMS:

• Your home (subs. 5 point 1): tax-free if it was the seller’s place of residence (elukoht) up to the sale, limited to one exempt sale every two years (subs. 6).
• Summer or garden house (suvila, aiamaja; subs. 5 point 4): tax-free if you owned it for more than two years and the plot is no larger than 0.25 hectares.
• Inherited property is not taxed when you receive it (subs. 4 point 1); a later sale is, unless another exemption applies.
• Restitution, privatisation and expropriation: homes returned under the ownership reform or privatised with a pre-emptive right (in that case with a plot of up to 2 ha), and compensation for expropriation (subs. 4 point 3; subs. 5 points 2 and 3).

Your home: no minimum ownership period, but once every two years

The exact condition in § 15(5)(1) is that the property contains a dwelling “which the taxpayer used as their place of residence until the transfer”. The law sets no minimum ownership period and no minimum number of days a year. EMTA points out that you can have two or more residences at once and that, following the Supreme Court, what counts is where you actually live, a matter of proof in each case.

The catch is § 15(6): where the exemption rests on use as a residence, it applies to no more than one transfer within two years, counted from the day after the previous sale was entered in the land register (kinnistusraamat). In EMTA’s example, one home was registered as sold on 26 January 2022 and another on 18 January 2024: the period started on 27 January 2022, so the second sale had to be declared.

Other EMTA rules that decide many cases:

• Your registered address (sissekirjutus) is not decisive. Residence can be shown with utility bills, telecom contracts or statements from neighbours.
• Working from home does not affect the exemption. Letting rooms or using part of the home as a company office does: with mixed use, the exemption is proportional to floor area (subs. 6).
• A storage room and parking space sold in the same transaction as the flat are exempt with it. Sold separately, they are taxed.
• Co-owners are assessed one by one: after a divorce, the spouse still living in the flat may be exempt while the other is not.

Summer houses: more than two years and up to 0.25 ha

For a summer or garden house, EMTA (in Estonian) lists three conditions: owned for more than two years, a plot of no more than 0.25 ha (2,500 m²), and a land register entry showing it as a suvila or aiamaja. If you inherited it, the two years run from the date of death; if it was a gift, from the gift. If the house no longer exists when you sell, you are selling land and there is no exemption. The once-every-two-years limit does not apply here. Nor is this about the cadastral land use, the sihtotstarve, which is a different thing.

How the taxable gain is calculated

EMTA’s formula, following § 37(1) TuMS: sale price – acquisition cost – costs directly related to the sale = taxable gain.

• Acquisition cost (soetamismaksumus, § 38(1)): the purchase price, improvements (a renovation, built-in furniture) and the fees and duties paid on purchase, such as the notary fee and state fee (riigilõiv) you paid as buyer.
• Costs of sale: those without which the sale cannot happen (notary and state fees paid by the seller) and those incurred to sell more successfully, such as the estate agent’s fee or a valuation.
• Not deductible: running costs of the flat — management fees, utilities, electricity.

Everything must be documented: no receipt, no deduction. If you bought in Estonian kroons, EMTA converts the cost at 15.6466 kroons to the euro.

Inherited or gifted property

Section 38(1¹) is blunt: the acquisition cost of inherited property is “only the costs incurred by the heir”, not the price the deceased paid. For gifts, EMTA applies the same approach: the recipient’s acquisition cost is €0, plus their own documented costs.

Worked example with the 2026 rate

Here are the figures from an example published by EMTA (in Estonian), with the 2026 rate applied. The flat is not the seller’s home:

• Sale price: €110,000
• Purchase price: €50,000
• Renovation, with invoices: €25,000
• Estate agent’s fee: €3,000
• Notary: €300

Gain: 110,000 – 50,000 – 25,000 – 3,000 – 300 = €31,700. At 22%, the tax would be €6,974. This is an illustration: a resident declares the gain together with the rest of the year’s income, and the 2026 return applies the annual basic exemption (maksuvaba tulu) of €8,400 under § 23(1) TuMS. And without the renovation invoices, EMTA adds, those €25,000 could not have been deducted.

A common misconception: “the bank took the money to pay off the mortgage, so I made nothing”. EMTA rejects this explicitly: if the sale price was higher than the purchase price, there is a taxable gain.

Selling as a non-resident: form V1 and your home country

If you live abroad, you are still taxed in Estonia on selling property located in Estonia (§ 29(4)(1) TuMS), at the same 22%. EMTA’s English page on gains from transfer of property says a non-resident “has to declare such income and pay income tax on it”. In practice:

• You declare the gain on form V1, table 3.1, with the property’s register number (kinnistu). Same deadlines: 30 April of the following year to declare, 1 October to pay.
• EMTA does not issue a tax notice to non-residents, so it is up to you to file.
• The home exemption applies to non-residents too, for example a former resident who lived in the flat until moving abroad and sold later. The exemption for restituted undeveloped land does not.
• A resident of another European Economic Area country may use the resident return instead, also declaring their foreign income so the basic exemption can be calculated.
• If you had to travel to Estonia for the sale, plane or ship tickets can count as costs of the transfer.

Paying in Estonia does not settle things at home. EMTA explains that the tax treaty does not exempt a non-resident from tax on the same gain in their country of residence: that country reduces its tax by the Estonian tax, and you pay the difference if its tax is higher. The same page lists the treaties that use the exemption method; as of 29 September 2026, Finland, Germany and Spain were not on it.

When and how to declare a 2026 sale

The gain from a sale is taxed in the year you receive the money; for an exchange, in the year ownership passes according to the land register. If the money arrives over several years, the cost and expenses are spread in proportion to what you receive each year.

1. Wait for the 2027 return

   Residents declare the gain on form A, the resident income tax return, which EMTA’s e-service accepts from 15 February 2027 (§ 44(1) TuMS).

2. Check the pre-filled data

   EMTA usually pre-fills the property-sale table from land-register data. Check it and add the acquisition cost and costs of sale: § 44(1¹) requires you to correct wrong or incomplete data.

3. File by 30 April 2027

   The § 44(1) deadline: 30 April of the year after the gain.

4. Pay by 1 October 2027

   The tax goes to EMTA’s bank account by 1 October of the year the return is filed (§ 46(3)).

An exempt sale, such as your home, is not declared. A taxable sale showing no gain still is, so the cost is on record. A loss on a second home is disregarded and need not be declared, but EMTA asks you to keep the documents for at least five years. Details are on EMTA’s page on declaring and paying (in Estonian).

EMTA does check. According to a reminder notice, in 2022 more than 1,600 property deals were pre-filled, and in about 500 its auditors had questions, found inconsistent data or saw no return. EMTA says it can require corrections up to three years back, and up to five where tax was deliberately avoided.

Costly mistakes

• Letting the home while it is on the market. EMTA warns that to sell it tax-free you must not let it before the sale “even for one month”.
• Selling two homes within two years, counted from the land register entry of the first sale.
• Selling the parking space or storage room in a separate deal.
• Throwing away invoices, or deducting electricity and management fees.
• Buying, renovating and reselling in a row. EMTA treats that as a business, to be declared as such.

For estate agents: exemption first, price second

Tax changes what the seller walks away with, and so the price they need. Before suggesting an asking price (see how to value a property), ask four questions: do they live in the flat until the sale? Have they let it, even partly? Have they sold another home in the last two years, and when was it registered? Do they have the invoices? The registration is in the land register; how to look it up is in our kinnistusraamat guide.

If the owner plans to let the flat while looking for a buyer, they should talk to a tax adviser first: they may lose the exemption.

Domuspace does not calculate taxes and is not connected to EMTA. What it does is organise prospecting: the cadastral map with the official plots of all of Estonia, where you save the owner’s contact linked to their plot, and contacts, on every plan. More in Domuspace in Estonia.

This article is for information only and is not a substitute for tax advice. The details were checked on 29 September 2026 against the official sources linked above; the TuMS versions already published for October 2026 and January 2027 do not change these rules.