Estonia, Markets and Companies, Real Estate, Taxation

Martin Vahter, managing director of 1Partner Kinnisvara, pointed out that unlike businesses which rent out their property, private individuals cannot deduct the costs they incur to improve and maintain the property.

"Being honest has been made very expensive, which is not good for law-abiding tax behavior and the state is losing millions of euros as a result," Vahter said in a press release.

"Just like a company, an individual has to incur specific costs related to the maintenance of real estate. It should be possible for an individual to deduct such costs and not pay income tax on them, or the state should offer a favorable tax rate to such people. Such as by taxing the house rent income of a private individual with a 50% lower rate," Vahter said, adding that the extra rate should apply to dwellings, not commercal premises.