Toleration payment
PROCEDURES FOR THE PAYMENT FOR TOLERATING THE UTILITY NETWORKS AND UTILITY WORKS OF AS TALLINNA VESI
Toleration payment, amount of toleration payment and conditions for payment
Pursuant to the Law of Property Act Implementation Act (LPAIA), the owner of the immovable property has the right to demand payment for tolerating the utility networks or utility works (hereinafter the toleration payment, but also the payment) for a property, the intended purpose of use of which is profit yielding land. The toleration payment is a periodic payment paid out annually.
According to the LPAIA, there is no right to demand a toleration payment for tolerating such part of the utility works of the utility network which is required for consumption of the service on the same property only. The statutory payment shall not be paid if there is a special agreement between the owner of the immovable property and AS Tallinna Vesi, which states that no payment is paid for the obligation to tolerate the utility networks or utility works. Also, no toleration payment shall be paid if its amount per immovable property is less than one euro.
The annual amount of the toleration payment shall be 7.5 per cent of the assessed value of the land multiplied by the coefficients of the spatial and substantive extents of the restriction. The coefficient of the spatial extent of a restriction is the ratio of the area of the restriction to the area of the cadastral unit. The presumed coefficients of the substantive extents of restrictions are provided in the appendix to the Law of Property Act Implementation Act. Calculation of the amount of the toleration payment shall be based on the data of the Land Board, information regarding the amount of toleration payment can be obtained by using the toleration payment calculator provided by the Land Board.
In case of the immovable property in co-ownership, each co-owner is entitled to receive a toleration payment to the extent of the share of their co-ownership in the property.
Pursuant to the Income Tax Act (ITA) § 19 (3) 15, income tax is not charged on payment made for tolerating utility networks to the extent of one third and income tax is charged on the remaining two thirds of toleration payment.
In case the payment is made to a natural person, the income tax shall be withheld by the payer (ITA § 40 and § 41 (7)).
Request for toleration payment
In order to obtain a payment, the owner of the immovable property must submit a standard format request regardless of whether the obligation to tolerate stems from the law, whether a land use contract has been signed (a contract establishing personal right of use or any other contract signed for a use of land), or whether a compulsory possession has been established.
In case of a property including several immovable properties (i.e. several cadastral units), the owner shall submit a separate request for each cadastral unit. In the case of the immovable property divided into apartment ownerships, the request may be submitted by the apartment association. In such case the toleration payment shall be paid to the apartment association, who is obliged to pay the received amount to the apartment owners or set it off against receivable management costs.
A person has the right to receive toleration payment for the current year if the person was the owner (incl. a co-owner or a joint owner) of the corresponding immovable property as at 1 January of the same year, provided that the person submits a request no later than on 1 May of the current year. Upon a change of owners, the new owner becomes entitled to receive payment after submission of a new request in compliance with the time limits provided in the LPAIA.
Toleration payment shall be paid on the basis of the submitted request also in subsequent years, which means that the submission of a new request every year is not necessary. HOWEVER, when the circumstances serving as grounds for receiving the payment change (e.g. any changes in the extent of the share of a co-ownership, or changes in payment data – such as the name, bank account etc.), the owner of the immovable property is required to notify immediately the owner of the utility network thereof. In case the owner fails to identify AS Tallinna Vesi of any changes in the data necessary for the calculation of toleration payment and for making the payment transactions (e.g. cadastral data, name of the owner, bank details, etc.), the request shall be annulled automatically and payment transaction is not made. The owner is obliged to submit a new request including correct data no later than on 1 May of the current year.
In case of any changes in the cadastral reference of a land unit, a new request is required.
The applicant shall be contacted additionally only in case of any further questions.
If verification of data shows that the applicant lacks basis to claim compensation from AS Tallinna Vesi, the applicant shall be informed thereof.
Toleration payment for the current year shall be paid no later than on 30 September of the current year and credited to the bank account specified in the request by the owner of the immovable property.
The request for toleration payment can be submitted in electronic form using the e-mail address tvesi(ät)tvesi.ee or by mail (letter addressed to AS Tallinna Vesi, Ädala 10, 10614, Tallinn). The request is made by filling out and submitting an application form available in the attachment below.
More information on toleration payments:
Mr Koit Gross, Servitudes Manager
Address: Ädala 10, Tallinn
Phone: 62 62 281
E-mail: Koit.Gross(ät)tvesi.ee