Toleration fee

The toleration fee depends on three aspects:

• the taxable value of the cadastral unit;
• the area of the protection zone for a utility network and technical infrastructure compared to the area of the cadastral unit; and
• intended purpose of the land.

 

The fee increases in line with the increase in the taxable value of land (in the course of regular land valuation, regarding which the State has set a goal to carry it out approximately once every ten years).

 

 

Amount of compensation

The general formula for calculating statutory toleration fee is as follows:  

annual toleration fee =

3.5% x taxable value of land x (area of the protection zone for technical infrastructure / area of the cadastral unit) x coefficient resulting from the intended purpose of land

According to the Annex “Substantive extent of restrictions arising from utility works of utility networks” (in estonian) to the Law of Property Act Implementation Act, the coefficient resulting from the intended purpose of land is 0–1, i.e. in certain cases the amount of the fee may also be 0 euros.

The coefficients for utility networks owned by Elering are:

 

For example, in a situation where there is a cadastral unit of 91.5 ha of agricultural land (profit-yielding land) used for a specific purpose, the taxable value of which is 366,555 euros and the area of the protection zone for a line in this cadastral unit is 6.4 ha, the annual toleration fee would be: 3.5% x 366,555 (6.4/91.5) x 0.5 = 448.68 euros.

The calculation of the toleration fee is based on data from the Land Board. Information about the owner of the technical infrastructure and the amount of the toleration fee can be seen in the toleration fee calculator of the Land Board.

In addition to the amount calculated based on the formula described above, the landowner has the right to demand compensation for unavoidable costs incurred as a result of tolerating the construction of the utility network and the amount of which exceeds one-third of the toleration fee described above. This does not take into account costs that are also in the landowner’s own interests and that the latter would therefore bear anyway (e.g. maintenance of construction works).

The toleration fee for the current year is paid no later than on 30 September of the same year. No toleration fee is paid if the amount is less than five euros per owner of the utility network or technical infrastructure for the immovables property owned by a person.

If the recipient of the toleration fee is a natural person, 1/7 of the toleration fee is exempt from income tax in accordance with the Income Tax Act (clause 19 (3) 15)). The remaining 6/7 of the toleration fee is subject to income tax and is withheld from the fee and paid to the Tax and Customs Board by the person making the payment.

Submitting an application for toleration fee

To receive toleration fee for utility networks and technical infrastructure, an application must be submitted to Elering, regardless of whether:

• the obligation to tolerate arises from the law;
• a contract for the use of land has been entered into (as a rule, a contract establishing a personal right of use); or
• compulsory possession has been established.

The deadline for submitting an application for toleration fee is 1 May at the latest.

The application can be submitted by the owner of the immovable or a person authorised by the owner. In the case of a immovable in common ownership, the application may be submitted jointly by the co-owners or by one of the co-owners as a representative on the basis of a power of attorney. The representative must prove their authority by a decision of the co-owners to appoint the representative. If the co-owners do not submit an application jointly, each co-owner shall submit an application separately for the amount of the legal share owned by them.

In the case of joint property (for example, property acquired during marriage), the application is submitted by the person entered in the land register as the owner.

In the case of joint ownership, the person submitting the application receives toleration fee for the entire registered immovable to the extent provided for by law, because in the case of joint ownership, the size of the owners’ shares in the joint property is not determined.

If the immovable is encumbered with a right of superficies or usufruct or other limited real right, the applicant for the fee is the owner of the immovable. If the owner of a right of superficies or usufruct applies for toleration fee, the application must be accompanied by a corresponding document confirming the transfer of the right to apply for toleration fee.

In the case of an immovable divided into apartment ownerships, an application may be submitted by an apartment association.

The person who was the owner (including co-owner or joint owner) of the respective immovable as of 1 January of the same year, and provided that the application is submitted by the prescribed deadline, is entitled to receive payment for the current year. If the owner of the immovable changes, the new owner of the immovable has the right to receive payment after submitting a new application, based on the deadlines provided for by law.

The fee will also be paid in subsequent years based on the submitted application – this means that it is not necessary to submit a new application every year.

The landowner is obligated to submit a new application to Elering if the basis for receiving the toleration fee changes. For example:

• the cadastral unit is divided or merged;
• agricultural land is used for its intended purpose in the protection zone for technical infrastructure;
• the size of the share of common ownership changes:
• details required for payment of the fee change (name, bank account, etc.).

An application for toleration fee can be submitted easily and conveniently in Elering’s service portal.

Apply for toleration fee

Using the application form in pdf format (in estonian), the application can also be submitted either:

• digitally signed by e-mail to [email protected]; or
• signed by mail to the address: Elering AS, Kadaka tee 42, 12915 Tallinn

Fill in the form (in estonian)