CrimeaPRESS reports:
Until December 1, 2023, owners of real estate in Russia must pay tax on it. In material from portal specialists CYANOGEN about what is subject to this tax and what is not, how it is calculated and whether it is possible not to pay it.
Personal property tax (that’s what it’s officially called) is a local tax, the amount of which is determined by each municipality independently. In cities of federal significance (Moscow, St. Petersburg and Sevastopol), it is established by the laws of these constituent entities of the Russian Federation.
Property owners must pay property tax annually no later than December 1 of the year following the expired tax period. That is, before December 1, 2023, it is necessary to pay the tax for 2022.
The payment amount is calculated once a year by the tax office, which sends a notice to the owner in the third quarter indicating how much and for what to pay.
IMPORTANT
If the owner has a personal account on the Federal Tax Service website, then the tax notification will automatically go there. If desired, you can make sure that notifications are sent in paper form by mail.
Who should pay personal property tax
Payers of real estate tax are the owners of residential and non-residential properties in Russia. If we are talking about an apartment or a house, then from the point of view of the law it does not matter who exactly lives there (including on a rental basis) or is registered. The tax is paid by the person to whom the property belongs according to documents.
Even if the property is not in use and is empty, taxes on it will still have to be paid.
The tax amount does not depend on citizenship and age, unless the person is included in a preferential category. For a minor owner, the state is paid by his parents or guardians. If the owner of the property is a foreigner, he will also receive tax notices once a year, regardless of whether he came to the country during the past tax period or not.
It also does not matter how the right to the property was transferred to the owner: he bought it, took it on a mortgage, received it by inheritance or as a gift. The obligation to pay tax appears immediately after registration of ownership.
Objects of taxation, or What is considered real estate
Personal property taxes apply only to real estate—objects connected to land that cannot be moved without causing disproportionate damage. The list of taxable property is given in Article 401 of the Tax Code of the Russian Federation.
It includes:
- residential building (including land for private farming, gardening, horticulture, individual housing construction);
- apartment, room;
- garage, parking place;
- a single real estate complex (a complex of buildings and structures that cannot be separated legally and technologically — a factory, a railway, etc.);
- unfinished construction project;
- other buildings, structures, structures, premises.
IMPORTANT
Common property of apartment buildings (MOPs, technical floors, adjacent areas, etc.) is not subject to property tax.
Everything that the legislation does not classify as real estate (car, savings, furniture, household appliances, jewelry) is classified as movable property. It is not subject to the tax to which the material is dedicated, but the owners of such things pay other taxes. For example, VAT is included in the price of a product, and car owners annually pay transport tax, which is often sent “complete” with a property tax notice.
Tax rate for individuals
The amount of property tax for individuals is calculated using a rate. This is a percentage of the tax base — the cadastral value of the property, which is determined by Rosreestr.
IMPORTANT
In 2023, a state cadastral assessment of all capital construction projects will be carried out in Russia. From this year, revaluation will take place in all regions every four years, and in federal cities — every two years.
The Tax Code of the Russian Federation specifies three basic tax rates, depending on the type of object and its value:
1. The following are taxed at a rate of 0.1% of the cadastral value:
- apartments;
- rooms (as well as shares and parts);
- residential buildings;
- objects of unfinished construction, if their design purpose is a residential building;
- garages and parking spaces;
- outbuildings up to 50 sq. m on plots for private farming, gardening, gardening or individual housing construction.
BY THE WAY
Municipalities, as well as cities of federal significance, have the right to set their own rates for the above-mentioned objects, namely: reduce the base rate of 0.1% to zero or increase, but not more than three times. That is, in different localities the range can vary from 0 to 0.3%.
For example, in Yekaterinburg the tax rate for an apartment, house, garage is 0.1%, and in Moscow it depends on the cadastral value of the property: the more, the higher (this type of rate is called progressive).
In particular, if a Moscow apartment costs up to 10 million rubles, the rate will be 0.1%. For a housing price from 10 to 20 million rubles, it will be 0.15%, from 20 to 50 million — 0.2%. For objects with a cadastral value of up to 300 million rubles, the rate is set at 0.3%.
You can find out the property tax rates in your locality on the Federal Tax Service website.
2. Other objects, for example, outbuildings from 50 sq. m. m on garden plots are taxed at a rate of 0.5%. Here, local authorities cannot change the federal “tax”.
3. Owners of property worth more than 300 million rubles, as well as owners of commercial real estate (for example, offices and retail space) pay 2% of the cadastral value. This rate is also not subject to revision.
IMPORTANT
When calculating property tax, apartments are treated as non-residential premises. The tax rate on them can range from 0.5 to 2%.
This depends on the region, the type of building they are in, and the type of permitted use of the building. Moreover, the tax rate for apartments is always higher than for an apartment.
How to find out the cadastral value of an object
You can find out how much the state values any registered property at in your personal accounts on the tax office or Rosreestr website. In addition, this information is indicated in tax notices.
Cadastral value when calculating property taxes in some regions began to be used in 2015, and since 2021 this has become a widespread practice. Previously, the inventory value of the object was taken into account.
IMPORTANT
The cadastral value is closer to the market value and may differ from the inventory value by 3–10 times. Therefore, if the amount of tax on the same property has increased in recent years, then most likely the municipality has changed the base when calculating.
Rosreestr revises the cadastral value of real estate every five years throughout Russia, except for Moscow, St. Petersburg and Sevastopol, where revaluation is carried out every three years.
WITH 2023 Rosreestr revises the cadastral value of real estate every four years throughout Russia, except for Moscow, St. Petersburg and Sevastopol, where revaluation is carried out every two years. Previously, revaluation took place once every five years in the regions and once every three years in federal cities.
How is tax calculated?
It is logical that the larger the area of the taxable object, the higher its value and the higher the tax. However, each object is subject to a tax deduction. In this case, this is an area for which you do not need to pay.
The owner has the right to a tax deduction for each property he owns. Even if he owns five apartments, a deduction will be provided for each of them.
This benefit is taken into account automatically and is expressed in the fact that when calculating the tax, not the full area of the object is taken into account.
Deduction sizes:
- for an apartment and a share in a private house — 20 sq. m. m;
- for a room and a share in an apartment — 10 sq. m;
- for home — 50 sq. m;
- for a house of 50 sq. m and less, property tax will not be charged at all.
EXAMPLE
With an apartment area of 100 sq. m, the tax will be levied on 80 “squares”, and in a country house with an area of 120 square meters. m — only 70.
If you bought an apartment with an area of 19.8 sq. m, then you will not be charged property tax on it.
Large families (raising three or more minor children) are entitled to an additional deduction for each child.
Its dimensions:
- when owning an apartment/room or part of it — 5 sq. m;
- for a residential building or part thereof — 7 sq. m.
EXAMPLE
The owner of an apartment with an area of 110 sq. m three minor children. Property tax for him will be calculated as follows:
110 sq. m (total area) – 20 sq. m (regular deduction) – 5 sq. m × 3 (preferential deduction for three children) = 75 sq. m
And if it were not an apartment, but a house, then it would not be taxed at all, since with an area of less than 50 “squares” the tax base is reduced to zero:
110 sq. m – 50 sq. m – (7 sq. m × 3) = 39 sq. m
Also, when calculating property tax, the ownership period coefficient (CPC) and the size of the ownership share in the object (D) are taken into account.
To determine the CPV, you need to divide the period of ownership of the object in months by 12. If the property was purchased before the 15th day inclusive, then this month is considered a full month, and if later than this period, the month is not counted. If you own the property for more than a year, the coefficient becomes equal to one. When selling an object, the opposite is true: the month is counted if the transaction took place after the 15th.
EXAMPLE
The apartment was bought on March 20, 2021 and sold on December 20 of the same year. Then March is not taken into account in the period, but December is counted, since both the emergence and termination of property rights occurred after the 15th of the month.
The tenure period in this case will be 9 months, and the CPV will be equal to 9/12, that is, 0.75.
The formula for calculating property tax looks like this:
(Cadastral value of property — tax deduction) × CPV × D × tax rate
Tax calculations for a specific object can also be done on the Federal Tax Service website.
Let’s calculate the amount of property tax for an apartment in Moscow for 2022. Its area is 60 square meters. m, the cadastral value is 17 million rubles, and there are two owners who own ½ share each. The apartment was purchased 16 months ago.
First, we will apply a tax deduction, for which we will calculate the cadastral value of 1 sq. m. m: 17,000,000 / 60 = 283,300 rubles. Area after deduction: 60 – 20 = 40 sq. m. Cadastral value of the apartment after deduction: 283,300 × 40 = 11,332,000 rubles.
Taxpayers purchased an apartment more than a year ago, so the CPV is equal to one, and since each owner owns half of the property, the size of the owner’s share (D) is 0.5. In Moscow, a progressive rate has been adopted, and for apartments worth 10–20 million rubles it is 0.15%.
We calculate property tax: 11,332,000 × 1 × 0.5 × 0.15% = 8,499 rubles.
Who can avoid paying property taxes?
Property tax benefits are available at the federal and local levels. The former are valid throughout the country, the latter are used in a specific region. For example, some municipalities offer benefits for minors from large families.
At the federal level, benefits are provided to pensioners, disabled people of groups 1 and 2, military personnel, heroes of the USSR and the Russian Federation, participants of the Second World War, and disabled children.
Beneficiaries from the federal list are completely exempt from paying property taxes. Local benefits can cover both the full amount of the tax and part of it.
You can check the list of beneficiaries in your region on the Federal Tax Service website.
You can only receive benefits for property that is not used for business activities — for example, an apartment, house, garage. In this case, the price of the object should be less than 300 million rubles. That is, if an apartment is rented out or a house costs 320 million rubles, then preferential taxation does not apply to them.
Benefits apply only to one object of each type. The owner can independently decide which one. If the owner has not made a choice, the tax office will automatically apply the benefit to the most expensive item.
EXAMPLE
The pensioner owns two apartments: in Tambov, with a cadastral value of 800 thousand rubles, and in Morshansk, with a cadastral value of 300 thousand rubles.
Since the first object is more expensive, by default the owner will receive a benefit (exemption from payment) for it, and the tax for the Morsha apartment will be charged in full.
The pensioner also has a private house and garage in Morshansk. These are other types of property, which means the benefit applies to them too, so you won’t have to pay tax either.
At the request of the owner, the tax office can change the object of preferential taxation. The owner must choose it before the end of the current tax period, for example, in 2023 — before December 31, 2023.
At the same time, the taxpayer can submit an application for the benefit itself, and not for the choice of a preferential object, at any time. If by that time the tax has already been calculated without benefits, then, upon receiving the application, the Federal Tax Service will recalculate it for future taxes.
HOW TO PAY REAL ESTATE TAX
The most convenient way is to pay tax directly from your personal account on the Federal Tax Service website or on the government services portal. This can also be done using the notification number on the tax website or by contacting the bank with a printed receipt.
What to do if there is an error in your tax notice
The procedure to take in this case depends on what kind of mistake was made. For example, if the area of the apartment is incorrectly indicated, but other data (cadastral number, address, full name of the owner) are correct, you need to send an application to the tax office, attaching an extract from the Unified State Register of Real Estate or a certificate of registration of rights, where the correct area is indicated.
If the owner does not agree with the cadastral value of the property or with the definition of the type of real estate, then he must first submit an application to Rosreestr and demand that this amount be recalculated.
TYPICAL ERROR
Parking spaces are often referred to in notices as “other buildings.” After this, the tax rate for them increases from 0.1 to 0.5%.
After completion of proceedings with Rosreestr (sometimes you have to go to court for this), supporting documents should be provided to the Federal Tax Service for tax recalculation.
What if the property is abroad?
Property tax is levied at the location of the property, that is, you must pay for real estate in the country where it is located. It does not matter whether the owner is a tax resident of the Russian Federation or not.
IMPORTANT
A Russian citizen is not required to notify the Federal Tax Service about the purchase of real estate abroad, unless he is a state or municipal employee.
But to pay tax abroad, the owner will need to open an account with a local bank. But citizens of our country are required to report the presence of such accounts to the tax office no later than a month after their opening.
If a Russian tax resident has income from foreign real estate, for example, rents it out or made a profit from its sale, then he has an obligation to pay income tax to the Russian budget. To do this, the owner fills out and submits a declaration to the Federal Tax Service in form 3-NDFL by April 30 of the year following the expired tax period.
An agreement on the avoidance of double taxation may be concluded between states. In this case, tax paid in another country can be offset in Russia. For example, in Spain the tax rate for non-residents of the European Union is 24%. Until 2023, having paid tax on the sale of an apartment there, in Russia the former owner did not have to pay anything.
But now the situation has changed in relation to a number of countries: in March 2023, the Russian Ministry of Finance and the Ministry of Foreign Affairs approached the president with a proposal to suspend double taxation agreements with unfriendly states. The corresponding decree came into force in August 2023. Now the tax burden for some owners of foreign real estate may increase.
However, similar agreements with about 40 other countries are still in force. A tax offset can be made, for example, by owners of properties in Turkey or the UAE. To do this, they need to submit a 3-NDFL declaration to the Russian tax office and attach documents confirming the amount of income received and the amount of tax paid abroad.
source: CYANOGEN
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