Inquiry Concerning the Taxation of Residential Land (No. 527)
Session: 15th Riigikogu, 3rd session, plenary sitting
Date: 2024-03-04 20:01
Participating Politicians:
Total Speeches: 28
Membership: 15
Agenda Duration: 29m
AI Summaries: 28/28 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu debated Inquiry No. 527, submitted by Varro Vooglaid and Anti Poolamets, concerning the taxation of land under residential buildings. The submitters, representing the opposition (EKRE), expressed deep concern over the government's intention to abolish the current tax exemption for residential land. They emphasized that taxing homeowners essentially transforms the ownership relationship into a tenancy relationship and particularly endangers the elderly and low-income individuals who might be forced to give up their inherited homes. The submitters cited Nõmme pensioners, whose land tax could exceed 1000 euros annually, and asked the Minister of Finance whether it was possible to avoid taxing residential land or to establish a cap on this tax.
Finance Minister Mart Võrklaev (Reform Party) responded that the land tax is essentially a local tax, which is collected entirely by local governments to fund roads and services. He confirmed that the tax exemption remains in effect in 2024, but the Minister of Regional Affairs is preparing legislative amendments that will grant local governments (LG) broader decision-making power in determining the land tax. Võrklaev stressed that the goal of the changes is to increase the freedom of local governments to decide whether and under what conditions residential land is taxed, and he rejected accusations of violating the inviolability of private property or adopting totalitarian tendencies, arguing that greater decision-making power for local authorities is a liberal value.
Decisions Made 1
No legislative decisions were adopted during the session. The discussion focused on the draft legislation currently being prepared by the government.
Most Active Speaker
The most active speaker was the interpellator Anti Poolamets (EKRE), who both submitted the formal question and delivered the closing statement. Poolamets represented the right-wing opposition, sharply criticizing the government's tax policy as an attack on private property and a move toward "Klaus Schwab's ideal society," where people are "nudged" into giving up their wealth.
Aseesimees Toomas Kivimägi
AI Summary
The Riigikogu proceeds to the next item on the agenda; the discussion concerns Interpellation No. 527, submitted by Varro Vooglaid and Anti Poolamets on May 24, 2023, regarding the taxation of land beneath one's residence, and the floor was requested on behalf of the interpellators.
Anti Poolamets
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Anti Poolamets emphasizes that although taxing the land beneath one's home has been positive until now, a large tax package could make holding onto property difficult and force pensioners to give up their homes. He then poses three questions: Is it possible to avoid this taxation, what steps should be taken so that retaining one's home does not become difficult due to the tax, and should a ceiling be established for the tax?
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi asked Minister of Finance Mart Võrklaev to answer the interpellators' questions from the Riigikogu rostrum.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev stated that the land tax is a local tax, the revenue from which accrues to local governments and is used to fund local services, roads, and maintenance. The taxable price is based on the value of the land, and the general rate is 1% (0.5% for residential land). Local governments have significant decision-making power, and the state collects the money and then distributes it to the localities. Furthermore, there is a plan to amend the Land Tax Act to increase the decision-making capacity of local governments and offer additional opportunities for granting tax exemption for land under a primary residence.
Aseesimees Toomas Kivimägi
AI Summary
The address includes thanks, the floor is opened for questions, and Martin Helme is invited to take the floor.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme said that party positions should not be described from the podium, adding that the current discussion was incomprehensible. He then asked whether the tax exemption for land under one's home would continue in 2025 or be abolished, and whether local governments would be given the opportunity to establish this exemption themselves.
Rahandusminister Mart Võrklaev
AI Summary
The tax exemption for residential land remains in effect in 2024. Although there are plans to grant local municipalities broader discretion in 2025 regarding the implementation, scope, and conditions of this tax relief, these changes cannot be enacted into law until they have been debated and approved in the chamber, and they are being overseen by the Minister of Regional Affairs.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi calls upon Varro Vooglaid.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid criticizes the Reform Party's current tax policy, reminding them of their previous commitment to the principles of protecting family values and private property, and questions whether the reduction of ownership being implemented through the car and home taxes is irreversible.
Rahandusminister Mart Võrklaev
AI Summary
Stressing the Reform Party's prudence and its commitment to defending families, liberal values, and freedoms, the speech confirms the plan to grant local municipalities the right to decide on the tax-exempt status of residential land, thereby increasing the municipalities' freedom regarding their revenue base and the provision of services.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi calls upon Henn Põlluaas to speak.
Henn Põlluaas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The core focus of the discussion is to request clear confirmation on whether the land tax ceiling will be raised next year and the tax exemption for land under homes will be abolished, even though the official plan stipulates that this change should take effect starting in 2025.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev stated that the final shape of the Land Tax Act is for the Riigikogu to decide, and taking into account the wishes of local governments, they are also considering the possibility of allowing local authorities to decide on the tax on residential land, as well as the question of the maximum land tax rate limit. This is because the drop in revenue has created a need for compensation, which the government addressed in 2024 by allocating funds to local governments from a one-million-euro reserve, and all these factors are being considered in conjunction with the requests made by local governments.
Aseesimees Toomas Kivimägi
AI Summary
This address is merely a plea to invite Rain Epler.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler asked during the spring session whether the issue of abolishing the land tax exemption would reach the Riigikogu, and how he would envision the subsequent flow of tax revenue to local governments—for example, if personal income tax were to accrue directly to local governments, allowing them to finance themselves.
Rahandusminister Mart Võrklaev
AI Summary
Võrklaev emphasizes that the amendments to the Land Tax Act must reach the Riigikogu in the near future so that local governments can gain clarity and factor the new tax rates into their budgets, given that a large portion of the income tax already goes to local governments and the state does not receive revenue from it.
Aseesimees Toomas Kivimägi
AI Summary
This is simply a request to invite Helle-Moonika Helme to the stage.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme claims that taxes have risen and a car tax is coming, and she assesses that the expansion of the real estate tax is a forced levy, through which the liberal-democratic force compels people to manage their spending better, and that in this manner, the country, under the leadership of the Reform Party, is moving towards totalitarian regimes.
Rahandusminister Mart Võrklaev
AI Summary
He confirmed that we are not on the path toward totalitarian rule, and that we are far from it.
Aseesimees Toomas Kivimägi
AI Summary
The communication contains only a request to call Arvo Aller.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller, in his address, pointed out the effect of the tax changes on local governments and pensioners. He criticized the redistribution of regional poverty, while also questioning whether removing the cap on taxing land under one's home would result in that land being taxed to the maximum extent permitted by law.
Rahandusminister Mart Võrklaev
AI Summary
Võrklaev stated that the claims are not entirely true, because local governments receive more income from pension revenues, which primarily helps areas with pensioners and is a significant victory. Regarding the land tax, more details will become clear upon the publication of the regional minister's draft bill, where it is stated that local governments may decide on the implementation of the tax on land under homes, and the regional minister will set the limits for tax increases, but opinions in local governments vary and the minister is consolidating them toward the best solution.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi invited Kert Kingo to speak.
Kert Kingo
AI Summary
Kert Kingo questions how the Reform Party’s promises to stand for freedom and families actually work in practice, given that their plans involve taxing the land under people’s homes. This measure, alongside car taxes, the removal of income tax relief for children, and other tax increases, clearly does not seem to be helping families.
Rahandusminister Mart Võrklaev
AI Summary
The decision-making authority regarding the tax on residential land and other land tax rates rests with the local government, not the central government, as the local government has a better understanding of local circumstances and budgetary requirements.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi thanked the minister, stated that there were no further questions, opened the debate, and first invited his colleague Anti Poolamets to the Riigikogu rostrum.
Anti Poolamets
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Anti Poolamets criticizes the plan to tax the land under people's homes and the responsibility being placed on local governments. He emphasizes that this directly affects homeowners, especially pensioners, during a time of economic recession and high energy prices, and threatens people's sense of security.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanks [everyone] and announces that the negotiations have concluded and the handling of this agenda item has been terminated.