For instance, one landowner whose tax amount was calculated at €180 last year got a notice this year for a sum of €240, a 33 percent rise, which surprised the recipient.

The Tax Board (MTA) confirmed that nonetheless all is actually correct.

Riita Parksepp, head of the MTA's land tax service, told ERR that this year's land tax calculation starts by multiplying the current value of the land by the applicable tax rate relating to the land's usage.

A protective mechanism applies if this result is over 10 percent higher than last period's land tax amount, exemptions and benefits excluded.

Parksepp said: "This means it is also necessary to calculate the multiplier of the former land value, based on the 2001 appraisal results, by the 2023 tax rates and compare this result with the multiplier result of the 2024 land value and tax rates."

The MTA website includes a sample calculation to help with this, she said.

When the current value of the land and the applicable tax rate is 10 percent higher than the 2001 land value and the 2023 tax rate, then a protective mechanism is applied.

The MTA then calculates land-based tax exemptions and individual tax benefits, subtracts them from the previously calculated and corrected tax amount with the protective mechanism, and thus determines the tax amount due this year.

Parksepp said this protective mechanism is applied when the land tax amount for a cadastral unit, a unit of land measurement, before exemptions and benefits comes to over 10 percent more than the previous period's land tax amount.

For this reason, land tax this year can differ by more than 10 percent in comparison with last year's sum.

The land tax can also vary by more than 10 percent from last year if the cadastral unit's designated use or area has changed in the meantime, since the calculation procedure then will be different.

"As there are many variations for each property which need to be considered when calculating taxes, we have tried to map out as many different scenarios as possible on our website, and to provide more detailed explanations in the frequently asked questions section," Parksepp went on.

This year, the factors most affecting the tax amount are: The regular land appraisal carried out in 2022, the land tax increase limit, ie. the protective mechanism, and a significant reduction of tax rates, in comparison with earlier rates, as set by local governments.

Previous regular land appraisals took place in the years 1993, 1996, and 2001.

In the 20-plus years since the last appraisal, the market value of land has multiplied several times, so the purpose of the mitigation mechanisms is to prevent a sudden impact on land tax and usage fees resulting from the newest appraisal.

Parksepp noted that although the value of land in Estonia has risen 8.3 times compared to the last appraisal, the amount collected from land tax has not increased. More people are paying land tax, but the total amount collected is less than before.

"This is because the law reduced the maximum tax rates that local governments can set," Parksepp said, adding that the 10 percent or €5 land tax increase limit should help bar any sudden rise in land tax.

This year, all existing tax exemptions and benefits were retained, including a housing land benefit added for multi-purpose land units, if one of the uses is residential land.

For example, if there is a commercial space on the first floor of an apartment building, starting in 2024, a homeowner in that building does not pay land tax on the commercial land.

In March, then Regional and Rural Affairs Minister Madis Kallas (SDE) sent a draft bill for coordination which would change the basis for determining land tax from next year and the following year.

Among other things, the draft bill proposed increasing the annual growth limit of land tax from 10 percent to as high as 50 percent.

However, an amendment has since been made to that bill which keeps it at 10 percent for the coming year.

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