Center for Defense Investments pays five times above market price for home in Nursipalu

Nursipalu. Photo: Arvo Meeks

The Center for Defense Investments (RKIK) reached the first transaction for the acquisition of a property with buildings in Nursipalu, southeastern Estonia, where the size of the transaction, including all compensations, was almost five times larger than the market value.

The amount of the first residential transaction is approximately half a million euros.

«We are very grateful to the family that reached an agreement with the state for reaching a purchase deal. This decision was certainly not easy, but it is all the more important to know that it is an important decision from the point of view of strengthening national defense, as the expansion of the Nursipalu training ground contributes to increasing the defense capacity of the whole of Estonia,» Defense Minister Hanno Pevkur said.

As additional compensation for reaching an agreement to acquire the real estate, the deal also includes a 20 percent incentive fee and a 10 percent additional fee, because it concerns a residential building. In addition, there is an income tax exemption when selling real estate to the state.

«There is no way we can emotionally compensate the value of one's home, but we can do everything we can to make the transition to a new living arrangement smooth and ensure that the situation is as close as possible to that before the transaction,» Pevkur said.

The compensation value is determined individually in the course of an evaluation. How much the amount of all compensations ultimately exceeds the market value will be determined separately for each property.

«We are prepared to spend time and energy to find a suitable solution with other property owners as well. Over the past 20 years, hundreds of real estate transfers have taken place during the development of national defense facilities, in which an agreement has been reached in almost all cases,» the minister added.