Results
The value of each plot of land can be checked on the updated land cadastre https://minu.kataster.ee/ on the valuation page by searching the address or the cadastral register number and opening the “Land value information”. "Taxable value of land (2024 land tax base)" is the taxation value valid on January 1 of this year. If the data of a plot of land (for example spatial shape, intended purpose) has changed after January 1, the value of the land is automatically recalculated. The "taxable value of land" is the valid value used in other land-related operations.
Only land is valuated, growing forests and buildings are not. The valuation is made based solely on data from databases – no on-site observations are carried out. The real estate transactions that have taken place, the data describing the land in the land cadastre and in other data sets, and the data necessary for an analysis of the real estate market are used as basis.
Mass valuations are carried out by the Land Board together with professional real estate appraisers. For the valuation, landowners and local governments only need to check the correctness of their data in the databases.
The 2022 valuation results were implemented from 1 January 2024.
The time for seeing the results of the mass valuation of land and providing feedback to it is not limited.
Using the results
Mass valuation of land is necessary to provide the public with information on the value of land. The valuation results will be used in land taxation, contracts for use, determining of tolerance compensations for utility networks, making transactions, and financial reporting.
Previous valuations took place in 1993, 1996, and 2001. In more than 20 years since the last valuation, the market value of land has increased many times over. The law provides for smoothing mechanisms to prevent the exponential impact of the valuation on land tax.
Land value is an important component of land tax.
Land tax = land value (€) ´ tax rate (%) - limit on land tax increase - tax reliefs and exemptions
To mitigate the impact of land revaluation on land tax, the following is applied:
- the law has reduced the maximum tax rates five times (before 2.0-2.5%, from 2024: 0.5–1.0%).
- setting a 10% growth limit on the annual increase of land tax. This means that no matter how high the estimated land tax is with the taxable value and tax rate of the land, the land tax cannot increase by more than 10% per year. In case the increase in the amount of land tax is 10% compared with the previous tax period, but is less than 5 euros, the amount of tax is increased by 5 euros. If the land use (purpose) has changed, the growth limit will be calculated based on the new purpose of use.
Local governments will implement the tax rates by 1 July of the year preceding the taxation year.
Previous results of mass valuations of land have been used in land reform operations – privatisation, compensation, and long-term contracts for land use (building right, usufruct). Therefore, thousands of contracts for use signed during the land reform, or lease contracts in the economic sense, are related to the taxable value of the land.
Usage fee (rent) = land value (€) x usage fee rate (%)
The regulations of the usage fees of other contracts for use (on the basis of the State Assets Acts, the Earth's Crust Act, the Water Act) have been changed, as well as toleration payments for tolerating utility networks and utility works.
To mitigate the impact of land valuation, the usage fees have been harmonised and their rate has been reduced in most cases to 3% (previously the usage fee rates have also been 4%, 5% and 7%). In addition, the possibilities of buying out land has been simplified in the building title (site leasehold) and usufruct contracts concluded during the land reform.
The taxable value of the land is the basis for determining the toleration payment for the utility network.
Toleration payment = land value (€) ´ toleration payment rate (%) ´ the extent of the restriction
To mitigate the impact of the increase in land value on network owners and to harmonise the usage fees, the rate of the toleration payment has been reduced to 3.5% from 1 January 2024. In 2019-2023 the rate was 7.5%.
The toleration payment may vary in 2024 by up to 33 per cent, and in 2025 by up to 66 per cent, of the difference between the toleration payments calculated on the basis of the taxable values of land determined on the basis of the results of the mass valuation carried out in 2022 and 2021.
As a result of mass valuation, up-to-date value data has been created, which will allow them to be used in simpler land transactions with smaller amounts (e.g. in road easement contracts, compulsory possession fees, organising land management). Usually, due to the lack of market information, it is also difficult for real estate appraisers to evaluate plots of land under roads or parks, while the transaction amounts for setting up road easements are small compared to the cost of ordering a valuation. Therefore, you might want to consider whether it makes sense to spend time and money on ordering a valuation, or whether you can use the fixed price set in the mass valuation.
It is important to specify the following:
- The value of forests, buildings, and other important parts will not be taken into account in the mass valuation of land. Therefore, the taxable value of the land does not reflect the value of the entire property, and for many plots of land, the value cannot be used directly.
- The results of a mass valuation of land are not as accurate as the results of a valuation ordered from a professional appraiser, but they give an initial indication of the market value of the land and help decide whether it is necessary to order an appraisal or not.
- Mass valuation of land takes place every four years. In the event of a rapid price increase or decrease, the results of the mass valuation may not be always current. Therefore, the real estate price index must also be observed when considering the results.
The taxable value of land is one way to reflect the value of land in financial reporting. The mass valuation of land follows the principles of objectivity and conservatism, similar to financial reporting.
According to the rules of public sector accounting, there is an option (but not an obligation) to revalue the land based on the taxable value of the land that was in effect at the time of the revaluation.
Private sector companies can also consider using the taxable value of the land as the carrying amount of the land they own, thereby cutting costs from ordering valuations.
When using the results, it is important to note that the results of the mass valuation of land do not reflect the value of buildings and biological assets.
The valuation methodology
The mass valuation of land is carried out on the basis of the Land Valuation Act. To update the methodological bases of the valuation and mitigate the effects resulting from the valuation, several amendments were made to the laws, which came into force on 15 March 2022.
The methodology is approved by a regulation of the Minister of the Environment.
The valuation methodology was developed in 2020–2021 in cooperation with professional real estate valuators, statistics experts, and experts in various fields, including foreign experts.
Real estate transactions of at least the last five years are analysed to calculate the value. Transactions are indexed to update the result.
To take into account the effect of the location, all plots of land in Estonia are divided into eight location classes of similar value. Dividing into location classes is necessary to make distinctions in the valuation methodology, because the market functions a bit differently in different locations. The valuation results do not need to be in the value range of the location classes.
Another important thing that affects the value besides location is land use. Land use determines the factors affecting the value and how the land is valuated, i.e. which valuation model is used for calculating the value during the mass valuation.
Valuation is done with automatic valuation models. The selection of a valuation model is also done automatically and depends on the purpose of the cadastral unit. Land use type (the natural composition of the plot of land) is also important in the case of profit-yielding land; in some cases, the model also depends on the location class. For example, national defence lands in location classes 1–3 are valuated as building land (these are buildings similar to office or manufacturing building buildings), in location classes 4–8, they are valuated as land without an active market (these lands do not have a market).
5 different valuation models are applied to lands with different uses
The building land model is a statistical model that is used to calculate the base value when analysing transactions of unimproved residential lands for a plot of land and it is adjusted with the effect of two factors: area and proximity to a body of water.
The base value is the estimated square metre value of a land plot on a type of land which has an area of up to 1,000 square metres and which is located away from a body of water. The base value is calculated by an analysis of the area and the 10 nearest transactions.
An area of over 1,000 square metres decreases the base value of the land plot. A different adjustment is applied in different location classes and area ranges.
Proximity to water increases the base value of the plot of land. Different location classes and water bodies have different scopes and extents of effect.
The building land model is not used in the first location class because there, the value is calculated using the building rights model, therefore the body of water factor does not apply. Additionally, the first four location classes do not concern Lake Peipsi or Lake Võrtsjärv. Small lakes are bodies of water with an area of at least 10,000 square metres and which are categorised as a lake, a reservoir, or an artificial lake in the Estonian Topographic Database. Rivers are sections of watercourses that are at least 8 metres wide, have an area of at least 800 square metres, and that are categorised as rivers in the Estonian Topographic Database.
The factors used in the valuation of building land have formed as a result of expert valuations of professional valuators when testing the valuation results and comparing them to market prices. They were replaced by factors that were initially calculated automatically.
In addition to the area and proximity to a body of water, other factors were analysed as well that were not considered during the valuation: public road access, distance from centres, building exclusion zones. Those factors were not included, because it was not possible to ensure the accuracy of the measuring methodology due to the quality of the baseline data, the effect was not statistically important, the relation of the effect was illogical or too weak (below 0.01 €/m2).
If the value of a model of a building land that was calculated using the model is smaller than the lowest value of a location class of a plot of land, the lowest value of a location class, i.e. the square metre value of a land without an active market, is used, except in location classes 7 and 8, where the lowest level – 0.30 €/m2 of the building land value – is used.
In designated areas of Tallinn and Tartu, the main factor influencing the value of building land is the building right. There, the value is not found through the square meter of the land, but through the square meter of the right to build, because more important than the size of the plot is how much can be built there or has already been built.
The area of the building right is determined by the local government as a closed gross area of the buildings, using the data of the building plan or the land register. If the area of the building right is over 500 m2, the value-decreasing adjustment of 0.02 per each 1,000 m2 is applied for the part exceeding it, until an adjustment of 0.7. For an area of building right in the range of 50,001–100,000 m2, the adjustment of 0.6 is applied, and starting from an area of 100,001 m2, the adjustment of 0.5 is applied.
The closed gross area values of a building right of an urban region (borough) are valuated by professional valuators via the analysis of sales and rents, transactions of land and apartments.
Where it is not possible to identify the area of building right, the value of a plot of land is valuated via the value of a square metre of building land. For this purpose, there are minimum square metre values of building land for urban regions (boroughs) that have been valuated by professional valuators. The value of a plot of land is calculated by multiplying the area of the plot of land with the value of the land of the urban region (borough), applying the area adjustments of the building land model. The value that is calculated via the square metre of the land is the valuation result even when the value of a plot of land found via the building right is smaller than the value that is found via the value of the land.
The agricultural land model is a statistical model that is used to calculate the base value through analysing of arable land sales and it is adjusted with the effect of various factors.
The base value is the estimated value of a square metre of a plot of land if this plot of land has access, the share of land use of permanent grassland of the Agricultural Registers and Information Board and waterlogged soils that limit cultivation is zero, and the plot of land has average indicators in other parameters. The base value is calculated by analysing transactions of all of Estonia and the 10 nearest transactions.
The soil fertility factor shows the weighted average value of soil fertility (quality) of the valuated plot of land. The higher the soil fertility, the higher the land plot unit value. Where it is not possible to identify the soil fertility factor due to a lack of data, the Estonian average soil fertility factor is applied.
The share of permanent grassland of the Agricultural Registers and Information Board, i.e. the land use factor, shows the share of a land plot that has been registered as permanent grassland at the Agricultural Registers and Information Board. The higher the share of permanent grassland, the lower the land plot unit value.
The share of waterlogged soils, i.e. the excess moisture factor, shows the share of soils that limit cultivation and that are waterlogged. The higher the share of waterlogged soils, the lower the land plot unit value.
The area factor on agricultural lands shows that the bigger the valuated land unit, the higher the value of land plot unit, and vice versa.
Possibility of access, i.e. the bordering road factor, shows whether the plot of land is bordered by a road. The lack of access to a road decreases the value of the land plot unit.
The selection bias correction factor shows how much the valuated land plot differs from land plots that are usually transaction objects. Arable land that is not registered at the Agricultural Registers and Information Board and that is not cultivated has a smaller value than those that are eligible for subsidies and that are cultivated. That factor is applied to avoid the over-valuation of assets that have less liquidity.
All the value affecting factors are calculated automatically in the agricultural land valuation model.
Other factors that were not considered in the valuation were also analysed: population, agricultural buildings, compactness. Those factors were not included, because the effect was not statistically important, the relation of the effect was illogical or too weak (below 0.01 €/m2).
If the value calculated via the agricultural land model is lower than the lowest value, then the valuation result is the lowest value (0.04 €/m2).
The forest land valuation model is used for valuating the land registered in the land cadastre as forest land. In assessing forest land, only the value of the land is taken into account and growing forest is not.
The value of the forest land is found by multiplying the base value by the quality factor.
The valuation is done by stand compartments and the result is summarised. The area is not adjusted.
The base value of forest land is the average price of sales transactions of forest land without forest. The transactions were checked by comparing historical satellite photos and the dates of the transaction to ensure that the set of transactions used in the analysis would only consist of clearcuts. The base value of forest land was based on sales transactions and it was 0.1883 €/m2 (1,883 €/ha).
It is necessary to consider the quality factor as all lands are not equal. Quality factors show the yield of a particular stand compartment compared to the average forest land, taking into account the site types, value of soil fertility, and land improvement (draining). The quality factors have been found in cooperation with forest experts.
If the forest land has not been fully inventoried and there is no data in the forest register, the average quality factor of a settlement unit is applied to the non-inventoried part of the forest land (if the forest register has the data of at least 10 stand compartments in this settlement unit) or the average quality factor of the local government (if the forest register has the data of less than 10 stand compartments in this settlement unit).
Various restrictions may decrease the value of forest land.
The coefficient 0.5 is applied to the part of forest land that is located in the area of nature conservation restrictions. Nature conservation restrictions are: special conservation area, limited management zone in a protected area, natural objects protected at the local government level, limited management zone of a single object of nature conservation, limited management zone of a species protection site, limited management zone of shores.
The part of forest land that is located in the area of strict nature conservation restrictions is valuated using the lowest value (0.04 €/m2). Strict nature conservation restrictions are: special management zones managed by the protected area, the natural special management zone of the protected area, strict nature reserve in a protected area, special management zone of a species protection site.
If the value calculated via the forest land model is lower than the lowest value, then the valuation result is the lowest value (0.04 €/m2).
The land without an active market is not normally a sales object and it is generally not possible to build anything there: transport land, waste storage land, public land, land covered by a water body, protected land, non-purpose land, profit-yielding land, other land, and national defence land located outside of cities.
The valuation of land without an active market is based on the lowest value of the location class that corresponds to the location of the respective plot of land.
The lowest value of the location class is found via an analysis. Transactions are not made in that location class at a lower price than that.
|
Location class |
Lowest value |
|
1 |
40 €/m2 |
|
2 |
10 €/m2 |
|
3 |
4 €/m2 |
|
4 |
1 €/m2 |
|
5 |
0,7 €/m2 |
|
6 |
0,3 €/m2 |
|
7 |
0,1 €/m2 |
|
8 |
0,04 €/m2 |
Last updated: 21.02.2024