First Steps and Further Steps: Creation of Property Market Estonia Case Study
Aivar Tomson and Ulleke Eerik
This paper describes the creation of property market in Estonia. During the Soviet occupation (1944-1991) the ownership rights of individuals were extremely limited and entrepreneurial freedom did not exist. Rights to the land were based on the long-term right of use only. There was no land market as the land use right was not transferable. The necessary legislation for land reform was introduced in the beginning of 1990s. Adoption of legal acts and appropriate registers can still be considered as a pre-condition for well-functioning property markets. Systematic registration is a prerequisite because otherwise there will be nothing to sell and buy. The Land Register was (re)-established in 1993 enabling private land ownership and mortgaging. A few years later it was something, which allowed the number of property transfers to grow in a much more rapid way. It also contributed quite a lot to the market transparency as the sales partly financed by commercial banks were properly declared. Despite of critics especially in the beginning of process, the land reform process in a wider context was rather successful. Experience and lessons learned in Estonia can be useful for some other countries, which are in the beginning of development.
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