Property tax in Moscow: What to expect in 2015
On 4 October 2014, Federal Law no. 284- FZ, About amendments to articles 12 and 85, parts 1 and 2, of the Tax Code of the Russian Federation, declared that the Law about taxes for private individuals no longer is in force.
The amendment modernizes the property tax structure by shifting to the cadastral value as the basis for taxing property. The rate will be 0.1 percent of the cadastral value for residential buildings and grounds, garages and parking structures, as well as buildings and areas under construction. For other kinds of buildings, owners will have to pay 0. 5 percent of the property value. The amendment empowers the regions and local authorities to decrease the tax rate to zero or to increase it from 0.1 to 0.3 percent.
According to the new rules for the cities of federal significance, that is, Moscow, Saint-Petersburg, and Sevastopol, the authorities must publish the legally enforceable enactments on taxes for real estate in 2015 no later than 1 December 2014. On 14 October 2014, the Moscow government adopted a new procedure for calculating the property tax, and on 22 October 2014, the Moscow City Duma passed it on its first reading
The current version of the bill proposes the following fee structure: 0.1 for property with prices up to RUB 10 million; 0.15 percent for property with prices from RUB 10 to 20 million; 0.2 percent for properties with prices from RUB 20 to 50 million; and 0.3 percent for properties with prices from RUB 50 to 300 million.
The new law will apply to representatives of businesses who have property registered to them as individuals. These could be administrative and business centers, trade centers and areas, nonresidential property, offices, and other such properties. Moreover, according to the bill, owners of offices, apartments, and flats whose property values exceed RUB 300 million also will have to pay 0.3 percent of the property cost.
The primary aim of the bill is to decrease the tax burden for the owners of small property, including apartments. Since the State Duma adopted the bill in its first reading, it is unlikely that it will change or reject it. A consequence of the legislation will be to increase the numbers of claims and legal proceedings of owners who wish to decrease the cadastral value of their property to reduce their tax liability. This already is the trend in Moscow because the tax rate for land is based on its cadastral value.
The ART DE LEX Russian-language posting of this news item that includes a link to the proposed legislation is at http://artdelex.ru/rus/news/chto-budet-s-nalogom-na-imushchestvo-v-moskve-v-2015-godu.
