How can an entrepreneur reduce land tax
Mikhail Parishioner talks about contesting the cadastral value of the land as a way to optimize land tax payments and explains how this process is going on, what are the chances of really reducing costs
The issue of reducing payments for land is always relevant for land users. Considering that in many cases rental payments and land tax are calculated on the basis of cadastral value, its reduction becomes one of the main ways to reduce the amount of payments for land plots.On January 1, 2019, a cadastral valuation in accordance with the new rules came into effect in Moscow and the Moscow Region. In accordance with the new procedure, the cadastral value is now determined by specially created budgetary institutions. They must take into account all the characteristics of the objects to be evaluated, as well as the results of the previous contest of the cadastral value. These changes were intended to improve the quality of the cadastral valuation. But, alas, in practice, everything turned out not so rosy, and the cadastral value of many land plots increased for no particular reason. However, the owners of land do not despair at all.
Challenging the cadastral value
With the introduction of the new procedure for determining the cadastral value, a new procedure for challenging it was introduced (in terms of the possibility of establishing the cadastral value equal to the market value based on the market value assessment report prepared by the landowner). In the framework of this procedure, the contestation of the cadastral value was somewhat simplified. In particular, the mandatory pre-trial procedure was abolished. Now, unlike the previously existing order, it is not necessary to apply to the commission under the Office of Rosreestr of the corresponding subject of Russia. Given that such commissions rarely made decisions in favor of the applicants, the introduced innovations became a boon for the owners of land, which now does not have to spend time on previously mandatory pre-trial procedures. In addition, the process of contesting the cadastral value has become much faster.
The practice of resolving disputes on contesting the cadastral value in courts has generally been established. In particular, almost always the courts, lacking special knowledge in the field of appraisal activities, tend to appoint forensic appraisals. The expert is instructed to establish whether the submitted evaluation report complies with the requirements of the law, on the basis of which it is proposed to establish market value. If the report does not meet the specified requirements, the question is raised of determining the market value of the object by an expert. As a rule, the value determined in the expert opinion forms the basis of the court decision.
If, for some reason, the applicants do not like the results of the examination, then it is possible to schedule a second forensic examination. But the procedure for appointing a re-examination is quite complicated – you need to prepare reasonable comments on the expert opinion. In the end, everything will depend on how professionally the representatives of the land user behave in court. Therefore, you should not save on lawyers as part of the procedure for contesting the cadastral value.
At the same time, despite the fact that it is no longer necessary to apply to the relevant commissions, in order to challenge the cadastral value, copyright holders can apply to the commissions that should be created in the constituent entities of the Russian Federation. However, such commissions have not yet been created everywhere. In particular, in Moscow such a commission has not yet been created. The composition of such a commission, in addition to officials, should include an authorized representative for protecting the rights of entrepreneurs in the subject, as well as representatives of public organizations and the business community. All this is designed to improve the quality of the consideration of questions of contesting the cadastral value. However, it is too early to talk about the practical effectiveness of such commissions, since they have just begun work.
It should be noted that in accordance with the new procedure, land owners received new advantages in terms of applying the cadastral value following the results of the contest. The challenged value will be applied from the moment when the results of the cadastral valuation were entered into the Unified State Register of Real Estate (USRN), and not from January 1 of that year when the corresponding application was filed, as provided for in the previous procedure.
However, for tenants of land plots the application of the contested value remained the same. The cadastral value established based on the results of the dispute shall apply from January 1 of the year when the corresponding application was submitted to the commission or court.
But nothing stands still, and already in the spring of this year, a change in the order of contesting the cadastral value is expected. And it is worth saying that the proposed changes will complicate the process of contesting the cadastral value.