Rental income tax calculator

Rental income of a private individual in Estonia is taxed with 22% income tax. If you let a flat or house under a residential lease, 20% of the rent is automatically treated as expenses and tax is charged on 80% – that is 17.6% of the rent. No expense documents are needed; the tax return applies the deduction itself.

The 20% deduction does not apply when the home is used for short-term stays (e.g. Airbnb, Booking), sublet, or used in the tenant’s business (e.g. as an office) – then the whole rent is taxed.

Utilities and service charges paid by the tenant are not rental income. If the tenant pays your loan instalments or land tax for you, those count as rental income.

If the tenant is a company, it must withhold 22% income tax from the rent. The 20% deduction and the basic exemption are applied in the tax return and any overpaid tax is refunded. With a private tenant you declare the rental income yourself in the tax return and pay the tax by 1 October of the following year.

The basic exemption (€700 a month, €8,400 a year) applies to all your income together. If your salary or pension already uses it up, the rental income is taxed without it.