Handbook “Transfer of immovable property”
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Transfer of immovable property located in a foreign country
The gains from the transfer of immovable property located in a foreign country to an Estonian resident natural person is subject to income tax in Estonia even if the gains from the transfer of immovable property was subject to income tax in the foreign country.
An Estonian resident natural person declares the mentioned gains and the income tax paid in the country where the immovable property is located in table 8.3 of the Estonian income tax return.
Double taxation is avoided in the income tax return of an Estonian resident natural person in Estonia by reducing the income tax calculated in Estonia with the certified income tax of a foreign country, if the income tax was paid according to the rules of the country where the immovable property was located.
Immovable property received as estate
When calculating the taxable income in Estonia, the mandatory certified inheritance tax paid in a foreign country on immovable property located in a foreign country can be added to the acquisition cost to calculate the gain from the transfer of the immovable property. This means that foreign inheritance tax reduces the amount of taxable income in Estonia.
In order to avoid double taxation in Estonia, we subtract the mandatory income tax paid in a foreign country from the income tax calculated based on Estonian rules.
If the transferred immovable property was located in one of the countries with which Estonia has concluded a valid tax treaty with the tax exemption method (Albania, United Arab Emirates, Bahrain, Bulgaria, Georgia, Guernsey, Netherlands, Hong Kong, Israel, India, Japan, Jersey, South Korea, Kyrgyzstan, Cyprus, Lithuania, Luxembourg, Macedonia, Isle of Man, Mauritius, Mexico, Serbia, Switzerland, Thailand, Turkmenistan, Uzbekistan, Vietnam), then the gain from the transfer of immovable property is exempt from income tax in Estonia based on the tax treaty. However, an Estonian resident natural person must declare the gains in table 8.8 of the Estonian income tax return.
The transfer of residence is exempt from income tax in Estonia, regardless of whether the residence was in a foreign country or in Estonia, in this case the gain does not have to be declared in Estonia.
Last updated on 08.01.2025
Tax-exempt or taxable transaction
This table provides a quick overview of real estate transactions that are exempt from tax when certain conditions are met. For more information about the transaction you are interested in, please view the handbook.
| Object of the contract of purchase and sale | Basis for tax exemption in the Income Tax Act | To the subject of ownership reform / a privatiser with the right of pre-emption / the owner | To a successor | To a legatee (is not a successor) |
To a legatee (is a successor) |
By gift or other transfer transaction |
|---|---|---|---|---|---|---|
| Property returned in the course of the ownership reform | § 15 (4) 5) | sale is exempt from tax | the tax exemption is passed on | the tax exemption is not passed on, gains are taxed | the successor's tax exemption applies | the tax exemption is not passed on, gains are taxed |
| Immovable property obtained by restitution after being unlawfully expropriated and the essential part of which is a dwelling | § 15 (5) 2) | sale is exempt from tax |
the tax exemption is passed on |
the tax exemption is not passed on, gains are taxed | the successor's tax exemption applies | the tax exemption is not passed on, gains are taxed |
| Immovable property privatised with the right of pre-emption and the essential part of which is a dwelling |
The dwelling together with land belonging to it has been privatised with the right of pre-emption and the size of the registered immovable property does not exceed 2 hectares. |
sale is exempt from tax | the tax exemption is not passed on, gains are taxed | the tax exemption is not passed on, gains are taxed | gains are taxed | the tax exemption is not passed on, gains are taxed |
| Summer cottage or garden house |
According to the register of construction works or the land register, the summer cottage or garden house has been in the person’s ownership for more than two years and the size of the registered immovable does not exceed 0.25 hectares. |
sale is exempt from tax | the tax exemption is not passed on, gains are taxed | the tax exemption is not passed on; if the conditions are met, the sale is exempt from tax | the tax exemption is not passed on; if the conditions are met, the sale is exempt from tax | |
| Expropriation on the basis of the Acquisition of Immovables in Public Interest Act | § 15 (4) 3) | sale is exempt from tax |
This table provides a quick overview of real estate transactions that are taxable (including, under certain conditions or in the absence of the required condition, taxable).
| Object of the contract of purchase and sale | Basis for taxation | Calculation of gains |
|---|---|---|
| Garage | § 15 (1) |
the difference between the acquisition cost and the sales price of the sold property |
| Land (agricultural or forest land) | § 15 (1) |
the difference between the acquisition cost and the sales price of the sold property |
| Real estate |
is not the residence and/or has sold the residence in less than two years |
the difference between the acquisition cost and the sales price of the sold property |
| Immovable property privatised with the right of pre-emption and the essential part of which is a dwelling |
there is no dwelling and/or land belonging to it has not been privatised with a right of pre-emption and/or the size of the registered immovable exceeds 2 hectares |
the difference between the acquisition cost and the sales price of the sold property |
| Storage space |
selling in a separate transaction from dwelling |
the difference between the acquisition cost and the sales price of the sold property |
| Parking spot |
selling in a separate transaction from dwelling |
the difference between the acquisition cost and the sales price of the sold property |
| Summer cottage or garden house |
not entered in the register of construction works or the land register, the summer cottage or garden house and/or owned by a person for less than 2 years and/or the size of the registered immovable exceeds 0.25 hectares |
the difference between the acquisition cost and the sales price of the sold property |
Last updated: 25.02.2026