Estonia rental yield calculator
Rental yield is the share of a flat's price that the rent returns in a year. Gross yield is the annual rent divided by the purchase price and ignores costs; net yield subtracts management costs, the maintenance fund, insurance and the income tax on rental income, and it is the only figure worth deciding on.
Maintenance fund, insurance, management, and any utilities the tenant does not cover.
- Gross yield
- 5.2%
- Annual rent
- €7,800.00
- Income tax on the rent
- €1,372.80
- Effective tax rate
- 17.6%
- Net income per year
- €5,227.20
- Payback period
- 28.7yrs
Rates and thresholds
- Gross yield
- annual rent / purchase price
- Net yield
- (annual rent − costs − tax) / (purchase price + transaction costs)
- Residential lease deduction
- 20% of the rent, no expense records needed
- Effective rate on a residential lease
- 17.6%
- Short-term letting and accommodation
- no deduction, taxed at 22%
How much tax do you pay on rental income in Estonia?
When letting a dwelling, a private individual may deduct 20 per cent of the rent to cover related expenses without documenting them — the Tax and Customs Board applies the deduction to the declared gross amount itself. The remaining 80 per cent is taxed, which makes the effective rate 17.6 per cent of the rent. On a rent of 650 euros a month, for instance, the annual income is 7,800 euros and the tax is 1,372.80 euros.
Does the 20 per cent deduction apply to Airbnb income?
No. The deduction applies only to income from letting a dwelling under a residential lease contract. Accommodation services and short-term letting, including through Airbnb, are declared as income from rent and get no deduction — the whole amount is taxed. The same goes for commercial premises, garages and land. The gap is real: on the same income the rate is 22 per cent rather than 17.6.
What counts as a good rental yield?
There is no single answer, and any figure promised without assumptions is a sales pitch. The sensible comparison is between the net yield and the alternatives that need neither work nor risk: if a term deposit or a broad index fund pays something similar, the flat has to make up the difference in price growth, which nobody can promise. Bear in mind too that net yield excludes major repairs and the vacant weeks between tenants — both happen, and both reduce the real result.
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