Estonia to cut compensation for building renovation to 20% — ERR News

In Estonia, the state will compensate only 20% of the costs of renovating apartment buildings in the coming years, whereas support previously ranged from 30% to 50%. A total of €160 million is planned to be allocated from the state budget for the work over four years, ERR News reports.

New funding rules

Infrastructure Minister Kuldar Leis explained that state funding is intended to bridge the gap between European Union budget periods. The first application round, worth €80 million, is expected as early as next year.

The new conditions will not provide for different levels of assistance depending on the building's location. Previously, the grant share in rural areas was higher than in Tallinn or Tartu. Now, compensation for buildings in Kehtna, Valga and Tallinn will be the same 20%.

According to Leis, at this level of grants, the funds return to the budget through taxes. He also said that the state cannot continue to cover 50% or more of the cost of the work, as the number of apartment associations seeking renovation has increased significantly.

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Demand exceeds available funds

Andres Jaadla, head of the Estonian Union of Cooperative Housing Associations, noted that reducing the share of support will require associations to hold additional discussions on whether they can continue their projects. According to him, in autumn 2025, nearly 350 housing associations did not receive funding due to a lack of funds.

Jaadla estimated the needs of associations that have already prepared for renovation at €400–500 million. He believes that €160 million will not cover existing demand.

Leis added that the government has also approved the possibility of allocating €288 million from the next EU budget period for 2028–2034 to housing renovation — approximately €40 million per year. Another €186 million could potentially come from the EU Social Climate Fund, provided Estonia joins the ETS2 emissions trading system.