Property Rental Abroad

As an Estonian tax resident, your worldwide income is subject to declaration, which is why it is important to be familiar with the tax obligations related to rental real estate abroad and to know the applicable rules and deadlines.

Principles of Taxation

Estonian tax residents are subject to the principle of worldwide income taxation, which means you must declare all earned income, including income obtained abroad. Since 2025, the personal income tax rate in Estonia has risen to 22%, which directly affects income generated from foreign real estate. It is important to know that income must be declared to the Tax and Customs Board even if you have already paid taxes in the country of location. To avoid double taxation, Estonia has concluded agreements with many countries, which may allow you to take into account income tax paid in a foreign country in Estonia or exempt the income from taxation in Estonia according to applicable rules. For more detailed information, we recommend contacting the Tax and Customs Board or consulting with a tax advisor.

Practical Steps and Local Requirements

Practical preparation for earning rental income begins with a thorough understanding of the rules of the country of location, as requirements can vary drastically from region to region. For example, in popular Spanish resorts, short-term rental often requires a special tourism license, and operating without it can result in hefty fines. When planning your investment, it is wise to familiarize yourself with Spanish real estate prices and market trends to find regions with the best returns. On our portal, you can find, for example, a renovated three-bedroom apartment in Puerto Banús, which already has the required license, making the transaction safer and allowing you to start operations more quickly.

Landlord Obligations and Apartment Preparation

When renting out real estate, you must account for fixed costs that cannot always be passed on to the tenant. The owner's expenses typically include costs related to property preservation, maintenance, and major investments. In foreign countries as well, the owner is generally responsible for the preservation of the building and long-term investments, but the distribution of costs depends on local law and the terms of the rental agreement. If your focus is on short-term rental, pay special attention to the qualities of a quality guest apartment to ensure guests have the comfort and security they expect. A good example is a three-room holiday apartment in Costa Adeje, which is located in close proximity to the beach and meets the needs of even the most demanding tourist.

Declaration Schedule and Reminders

The declaration process requires accuracy and proper maintenance of documents throughout the year. When declaring income from abroad, you generally must submit information about the amounts received and taxes already paid there to determine your final tax liability in Estonia. For more detailed information and up-to-date instructions, it is worth familiarizing yourself with the official explanations of the Tax and Customs Board. Before the start of a new rental period, it is recommended to prepare the real estate for the new tenant by checking both technical systems and the general condition of the rooms.

Owning and renting real estate abroad is an excellent way to diversify your investment portfolio and earn stable passive income. By keeping your documentation in order and following both Estonian and the target country's laws, you create a strong foundation for successful international business activities. If you want to find reliable offers and safe investment opportunities, explore what real estate abroad is currently available and take the next step in expanding your real estate portfolio.