Get ready to pay property tax based on new rules
A new base for accrual of property tax will be determined by the end of 2018 in St. Petersburg.
Who will be affected?
- All owners of real estate property in St. Petersburg for which tax property is determined on the basis of cadastral value[1];
- Land owners;
- Tenants of properties in federal or municipal ownership;
- Anyone who plans to buy state-owned land
What is the point of this change?
All real estate properties in St. Petersburg, including land will be subject to cadastral valuation in 2018[2]. The new cadastral values that will result from this valuation will then be used as base to calculate property tax. These new cadastral values should be used already in 2019 so real estate property owners will pay taxes calculated on their basis already in 2020.
This is the first time that the state, i.e. St. Petersburg State Institution Kadastrovaya Otsenka will conduct cadastral valuation which, in the past, had been completed by independent valuation organizations. This state valuation will be conducted under new rules[3]. A list of valuation properties has been preliminarily compiled by St. Petersburg State Institution Kadastrovaya Otsenka and published on the website of St. Petersburg Property Committee.
The law grants to property owners the right to submit to St. Petersburg State Institution Kadastrovaya Otsenka the characteristics of the property they own (prior to the beginning of the cadastral valuation) and to all interested parties the right to submit comments on interim valuation reports (after their publication) together with a real estate property statement. The publication of interim reports in St. Petersburg is tentatively expected to begin in June 2018.
Another important point is that current cadastral values, which will still be used in 2018 for tax purposes, could be challenged only until new cadastral values are recorded in the State Register of Real Estate Property[4].
What can be done to reduce tax/lease payments?
- Start challenging already now the current cadastral value if there is reason to believe that it was determined incorrectly;
- Submit comments within 50 days of publication of interim reports on cadastral valuation. To do so, it important to monitor the publication of interim reports and prepare in advance a statement of property characteristics (drawn up on approved form).
We would be pleased to assist you in challenging the current cadastral value of any property you may have or in monitoring the publication of interim reports and preparing the required statements.
Please note that it will be possible to challenge new cadastral values at a later date before a commission established especially for that purpose under St. Petersburg Federal Service for State Registration, Cadaster and Cartography, and also in court in case of dismissal of cadastral value review.
If you have any questions or would like to discuss this matter further, please write to Julia Talagaeva.
Yours truly,
The Forte Tax&Law Team
[1] Real estate property types are defined in Article 378.2(1) of the Russian Tax Code and Article 1-1 of St. Petersburg Law On Property Tax of Organizations
[2] St. Petersburg Property Committee Order No. 35-p
[3]Federal Law On State Cadastral Valuation
[4] Article 22(1) Federal Law On State Cadastral Valuation