Inquiry Regarding Increasing the Decision-Making Authority of Municipalities Concerning the Establishment of Land Tax Rates (No. 777)
Session: 15th Riigikogu, 6th sitting, plenary sitting
Date: 2025-09-15 19:18
Participating Politicians:
Total Speeches: 44
Membership: 15
Agenda Duration: 32m
AI Summaries: 44/44 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The agenda item concerned the interpellation submitted by Riigikogu members Lauri Laats, Vadim Belobrovtsev, Aleksei Jevgrafov, Andrei Korobeinik, Aleksandr Tšaplõgin, Vladimir Arhipov, and Peeter Ernits (Centre Party) to the Minister of Regional Affairs and Agriculture, Hendrik Johannes Terras, regarding the increase of decision-making power for local governments (LG) in setting land tax rates. The submitter of the interpellation, Lauri Laats, criticized the government's economic policy and claimed that the amendments to the Land Tax Act adopted last year, which increased the rate of taxation, forced local governments to raise taxes because the central government had simultaneously increased their obligations and imposed other taxes. Laats highlighted that the amendment eliminated the previous right of local governments to set a lower tax rate for arable land and natural grassland used for agricultural purposes compared to the general rate for commercial land. Following the 2022 land valuation, where the taxable value of arable land increased significantly (by an average of 22.5 times), this unified rate created a situation where local governments must choose between excessively taxing farmers and a drastic drop in revenue collected from forest land.
Minister Hendrik Johannes Terras rejected the claim that the decision-making power of local governments had decreased, emphasizing that they had been granted greater flexibility (three differentiation groups, the right to set a cap on annual growth starting from 2026, and a sum-based exemption for land under one's home). However, the minister acknowledged the tension that has arisen in the taxation of forest land and arable land, stemming from the differing growth in land value. Terras considered a discussion on restoring separate tax rates justified, referring to the different economic logic of agricultural and forest land (annual income vs. long-term investment). He confirmed that a thorough analysis is underway at the Ministry of Regional Affairs and Agriculture, which will be completed this autumn, and based on its results, the government plans to consider initiating a draft amendment to the Land Tax Act to create a fairer and more sustainable system. During the negotiations, opposition politicians (Centre Party and EKRE) criticized the government, accusing them of forcing local governments to pass the tax burden onto the people, especially in rural areas where residents' livelihoods are already difficult.
Decisions Made 1
Decisions were not made
Most Active Speaker
Anastassia Kovalenko-Kõlvart (Centre Party) was the most active participant in the negotiations, delivering a passionate speech in which she sharply criticized the government's policy and its impact on local authorities, labeling the government’s talk about the independence of local governments as hypocrisy. (Position: Left)
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar proceeded to the second item on the agenda, which was an interpellation by Riigikogu members concerning the expansion of the decision-making authority of local government councils in setting land tax rates, and he asked his colleague Lauri Laats to introduce the interpellation.
Esimees Lauri Hussar
AI Summary
Under this agenda item, the interpellation submitted on May 14th concerning the expansion of local governments' decision-making power in setting tax rates will be introduced. The presentation of the interpellation will be carried out by colleague Lauri Laats.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats began by criticizing the government's economic policy, emphasizing that the failure to make decisions and subsequent tax increases are forcing local municipalities to raise land tax. He then focused on an interpellation to the Regional Minister concerning recent amendments to the Land Tax Act, which abolished the right of local governments to differentiate agricultural land from other types of commercial land. He demanded the restoration of this decision-making power in order to take local specificities into account and support the productive use of land.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats criticizes that the state is not promoting the economy and that changes to the Land Tax Act reduced the decision-making power of local governments, which causes unequal and burdensome taxation, and presents three questions to the Minister of Regional Affairs and Agriculture regarding the restoration of these rights and the amendment of the Land Tax Act, referring to an interpellation compiled by seven members of the Centre Party.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar gave the floor to the Minister of Regional Affairs and Agriculture, Hendrik Johannes Terras, who had been called to the Riigikogu rostrum to answer the submitted interpellation.
Esimees Lauri Hussar
AI Summary
The Speaker invites the Minister of Regional Affairs and Agriculture, Hendrik Johannes Terras, to the Riigikogu rostrum to answer the interpellation.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
Minister of Regional Affairs and Agriculture Hendrik Terras stated that the autonomy of local governments in shaping the land tax is greater than ever before. He introduced three tools (taxation divided into three groups, an annual growth restriction set to take effect starting in 2026, and a sum-based exemption for land under one’s home) and confirmed that an analysis will be completed this autumn. This analysis will form the basis for submitting a draft bill for a fairer, clearer, and long-term sustainable land tax system.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
Minister of Regional Affairs and Agriculture Hendrik Johannes Terras responded to an interpellation concerning land tax, refuting claims that local governments' decision-making power had been diminished. He emphasized the availability of new, flexible tools, but simultaneously acknowledged a problem in balancing the taxation of arable land and forest land, which stems from differences in valuations. He further promised that the ministry would conduct a thorough analysis by autumn to consider restoring separate tax rates for agricultural and forest land, aiming to create a fairer and more sustainable system.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the esteemed minister and then gave the floor to his colleague, Vladimir Arhipov, who commenced the round of questions.
Esimees Lauri Hussar
AI Summary
The Chairman thanks the Minister and announces that there are questions, the first of which will be asked by colleague Vladimir Arhipov.
Vladimir Arhipov
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Vladimir Arhipov stressed that local governments should be granted greater discretion in setting differential land tax rates so that they can take into account regional characteristics and the economic well-being of the residents.
Vladimir Arhipov
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Vladimir Arhipov, expressing concern over the forced increase in land tax for local governments—a measure necessitated by the new land tax system and a deficit in state funding—is asking the minister whether it would be practical to immediately grant local authorities greater decision-making power in setting differentiated land tax rates. This would enable them to take into account regional characteristics and the economic well-being of local residents.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
The focus of the address is that boundaries will be established with the flexibility of local governments, taking into account the specific characteristics of agricultural and forestry land and taxation in each region, and that cooperation with the Association of Estonian Cities and Rural Municipalities will continue.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
The Minister of Regional Affairs and Agriculture, Hendrik Johannes Terras, explains that although the limits of the land tax are stipulated by law, local governments possess the necessary flexibility when setting the rates in order to take into account the specific needs of their region and the interests of businesses, especially regarding the taxation of agricultural and forest land. This flexibility is exercised in close cooperation with the Association of Estonian Cities and Rural Municipalities.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar asks Peeter Ernits to come.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits sharply criticizes the situation, asking why the system was adopted in the first place if the minister now admits its unfairness, forcing them into a position where they have to start making it more practical and reasonable a few years down the line.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The speaker asks why the unfair system was implemented and suggests considering its modification and making it more relevant to real life.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
Minister of Regional Affairs and Agriculture Hendrik Johannes Terras explains that although he was not present during the discussions regarding the land revaluation, the significant value discrepancies stemmed from a 20-year period without assessment, during which the value of agricultural land grew four times faster than that of forest land. He also emphasizes the need to analyze how to make future decisions fairer for local authorities and businesses.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
Terras said that the revaluation exposed huge discrepancies: agricultural land experienced a fourfold increase in value compared to forest land, and further steps must be analyzed to make them more realistic and fairer for local governments and entrepreneurs.
Esimees Lauri Hussar
AI Summary
The Chairman called upon Lauri Laats to speak.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats thanked the minister, noting that the response to the inquiries was available and that work was ongoing. He then asked about the impact of raising the land tax on regional policy, local governments, and the public, and inquired whether such an analysis had been conducted.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats welcomes the fact that the minister has taken previous proposals into account, but then focuses on the significant rise in land tax, asking the regional minister how this tax increase has affected regional policy and the public, especially considering the major socio-economic differences between South and North Estonia, and inquires whether an analysis of its impact is available.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
In the case of land tax, local municipalities have the opportunity to consider regional specificities and involve members of the council in the decision-making process, granting them the freedom to tailor the structure of their respective municipality.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
The Minister of Regional Affairs and Agriculture, Hendrik Johannes Terras, thanks the inquirer for their thorough interest and promises to locate the necessary analysis. However, he emphasizes that the land tax issue is precisely the area where local governments have the freedom to take into account regional specificities and the structure of the municipality, involving all council members in the decision-making process.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Arvo Aller to speak.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller voiced concern that differing land tax rates could cause issues following the merger of Jõhvi and Toila, and criticized coalition members for casting votes without proper deliberation.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller reproaches the respondent to the interpellation for having previously voted without thoroughly examining the substance of the matter. He stresses that the inflexibility of the decision poses serious problems for merging local governments, such as Jõhvi and Toila, who are forced to resolve the issue of how to manage different land tax rates within a single administrative unit.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
Minister of Regional Affairs and Agriculture Hendrik Johannes Terras acknowledged that he currently lacks a detailed answer regarding the applicable municipal rates. He offered two possible scenarios (either one of the new rates will be applied, or the previous ones will remain in effect for the transition period) but promised to look into the matter more thoroughly and send a precise response.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
Minister of Regional Affairs and Agriculture Hendrik Terras said that he does not currently have a detailed answer, but he is investigating whether the rates of either municipality will be applied or if the previous rates will remain in force during the transition period.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Helle-Moonika Helme to speak.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme criticizes the fact that the abolition of restrictions on land tax rates and their sharp increase primarily burdens poorer municipalities and the owners of agricultural and forest land who face nature conservation restrictions related to the green transition, and she questions whether people should really still be forced to pay.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme sharply criticizes the central government's decision to lift the cap on land tax increases, a move which grants financially struggling local governments the ability to drastically hike tax rates. She stresses that this is especially unjust toward owners of agricultural and forest land, whose expenses are already being compounded not only by the tax increase but also by the strict nature conservation restrictions stemming from the green transition, rhetorically questioning whether the only thing left for the Estonian people to enjoy is endless paying.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
The Minister of Regional Affairs and Agriculture, Hendrik Johannes Terras, emphasized that land tax is a matter of local government autonomy that should be strengthened, and highlighted the need to analyze and adjust the possibilities for economic activity on commercial land, where nature conservation restrictions currently create inconsistencies.
Regionaal- ja põllumajandusminister Hendrik Johannes Terras
AI Summary
The Minister of Regional Affairs and Agriculture Terras stated that the autonomy of local governments in setting the land tax is justified and should be increased, and regarding nature conservation restrictions and special conditions for commercial land, adjustments must be made based on the analysis, if necessary.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the Minister, noted that there were no further questions, and announced that he would next open the debate, inviting Anastassia Kovalenko-Kõlvart to the Riigikogu rostrum to take the floor.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the respected minister, concluded the round of questions, and then opened the discussions, inviting the next speaker, Anastassia Kovalenko-Kõlvart, to the Riigikogu podium.
Anastassia Kovalenko-Kõlvart
Profiling Eesti Keskerakonna fraktsioonAI Summary
Anastassia Kovalenko-Kõlvart asserts that the government’s plan to increase the land tax will burden local municipalities and result in the expansion of central government politics (Toompea) down to the local level. She urges the public to elect strong local representatives capable of resisting anti-people policies and, when necessary, appealing to the Supreme Court.
Anastassia Kovalenko-Kõlvart
Profiling Eesti Keskerakonna fraktsioonAI Summary
Anastassia Kovalenko-Kõlvart sharply criticizes the government’s decision to allow local municipalities the opportunity to raise the land tax severalfold, deeming it a hypocritical attempt to force local governments to fleece the populace, arguing that the state continuously imposes new obligations without providing adequate funding. She warns that Toompea’s anti-people tax policy will thus be transferred to the local level, and calls on voters not to support the parties and politicians responsible for the recent tax chaos at the state level, but instead to elect strong representatives who can stand up to this policy.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked [the previous speaker/the audience] and handed the floor over to colleague Arvo Aller, asking him to come up to the podium.
Esimees Lauri Hussar
AI Summary
The Chairman thanks the assembly and invites his colleague, Arvo Aller, to the rostrum.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller sharply criticizes the increase in land tax, which was made possible after the removal of the restriction imposed by the previous government, stressing that this directly impacts the wallets of agricultural producers and threatens food security at a time when farmers are in need of state support. He accuses the government of indifference and promises that the land tax will be lowered when EKRE comes to power.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller notes that the valuation of the land tax is necessary, but the current government has removed the restrictions, which could allow an increase of up to 10% in 2026. He adds that this would harm agriculture and food producers, which is why he promises that an EKRE government would lower the land tax and provide better support for farmers.
Esimees Lauri Hussar
AI Summary
The Chairman concludes the consideration of today's second agenda item, since there are no requests to speak and the Minister does not wish to take the floor, and closes the debate.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the participants, noted that there were no further requests for the floor (the minister also declined to speak), and closed the debate, thus concluding the consideration of the second item on the agenda.