Farmland Rental Prices vs Sale Prices in Estonia
Estonian farmland owners often face a choice — continue renting out the land or sell the property? Both options have their advantages and disadvantages. This article compares farmland rental prices and sale prices by county, calculates return on investment, and helps you make an informed decision.
Key facts about the Estonian farmland market
- Average farmland sale price in Estonia: 4,000 - 8,000 EUR/ha (depending on region)
- Average rental price: 80 - 200 EUR/ha per year
- Rental yield (ROI): 1.5 - 4% per year
- Farmland prices have risen approx. 80-120% over the past 10 years
- Average rental contract length: 3-5 years
Rental and sale prices by county
The table below gives an overview of Estonian farmland rental and sale prices in different counties. Prices are indicative and based on market data.
| County | Rental price (EUR/ha/year) | Sale price (EUR/ha) | Rental ROI (%) |
|---|---|---|---|
| Harjumaa | 150 - 220 | 6,000 - 10,000 | 2.0 - 2.5% |
| Tartumaa | 140 - 200 | 5,500 - 8,500 | 2.0 - 2.5% |
| Jõgevamaa | 130 - 190 | 4,500 - 7,500 | 2.5 - 3.0% |
| Viljandimaa | 130 - 190 | 4,500 - 7,500 | 2.5 - 3.0% |
| Lääne-Virumaa | 120 - 180 | 4,500 - 7,000 | 2.2 - 2.8% |
| Pärnumaa | 110 - 170 | 4,000 - 6,500 | 2.3 - 2.8% |
| Võrumaa | 80 - 140 | 3,000 - 5,500 | 2.2 - 2.8% |
| Valgamaa | 80 - 130 | 3,000 - 5,000 | 2.2 - 2.8% |
| Ida-Virumaa | 80 - 130 | 2,500 - 5,000 | 2.5 - 3.0% |
| Saaremaa | 80 - 140 | 3,000 - 5,500 | 2.2 - 2.8% |
Note: prices depend on the specific property, soil fertility, area, and access. For an accurate price offer, visit Metzfund's farmland purchase page.
Return on investment (ROI) calculation
Let us look at a concrete example: you have 20 ha of farmland in Tartumaa.
Option A: Continuing to rent out
- Rental price: 170 EUR/ha/year
- Annual rental income: 20 ha x 170 EUR = 3,400 EUR
- Land tax: approx. 20 ha x 15 EUR = 300 EUR
- Net rental income: 3,100 EUR per year
- 10-year rental income: 31,000 EUR
Option B: Selling and investing the proceeds
- Sale price: 20 ha x 7,000 EUR = 140,000 EUR
- Income tax on sale profit (if not residential land): approx. 20% of profit
- Investment return (e.g. deposit interest at 3.5%): 4,900 EUR per year
- 10-year income: 49,000 EUR (simple interest, without reinvestment)
Practical tip
The decision between renting and selling depends on your personal circumstances. If you need a larger sum now (for investment, debt repayment, or improving quality of life), selling makes sense. If you prefer a stable but smaller annual income, renting is the better choice. Metzfund offers a free price offer that helps you decide.
Advantages and disadvantages of renting out
Advantages
- Stable annual income
- The land remains your property — value grows over time
- Land tax can be covered from rental income
- Option to pass it on to children as an inheritance
Disadvantages
- Low yield (2-3%) compared to other investments
- The tenant may treat the land poorly
- Finding a new tenant at the end of the rental contract can be difficult
- Land tax and administrative work remain the owner's responsibility
- Capital is tied up — cannot be invested elsewhere
Advantages and disadvantages of selling
Advantages
- Full amount received immediately — flexibility to invest
- No land tax obligation or administrative work
- Can repay debts or fund other projects
- Market is currently at a high level — further price rises are not guaranteed
Disadvantages
- The asset is gone — cannot be bought back at the same price
- Income tax on sale profit (20%)
- Land value may continue to rise in the future
- Emotional ties to family land
“The Estonian farmland market has shown strong price growth over the past decade, but this does not mean growth will continue at the same pace. Prices are currently at historically high levels, which makes selling attractive. Those who continue renting should bear in mind that a 2-3% yield does not always keep pace with inflation.”
— Metzfund land market analyst
Frequently asked questions
Is income tax always payable on farmland sales?
Income tax applies to the sale profit — the difference between the purchase and sale prices. If you inherited the land, the sale of inherited property is income tax-free. If you purchased the land, a 20% income tax applies to the profit portion. A tax exemption applies to residential land (up to 2 ha of housing land).
How much have Estonian farmland prices risen over the past 10 years?
Estonian farmland prices have risen on average 80-120% over the past 10 years, depending on region. In areas with more fertile soils (Jõgevamaa, Tartumaa) the rise has been greater; in less fertile areas more modest.
Does Metzfund buy farmland too?
Yes, Metzfund buys agricultural and grassland across Estonia. We provide a free and non-binding price offer within 24 hours. We buy both standalone farmland and combined properties (farmland + forest land).
Will rental prices rise in the future?
Rental prices have risen in recent years, but the pace of growth depends on agricultural subsidies, food prices, and the general economic situation. Rental price growth is not guaranteed — during an economic downturn prices can also fall.