The Ministry of Finance proposes to increase property taxes. Symbolically…

Authorities, the portal reports IRN.RU, plan not only to abandon the flat personal income tax scale, but also to change taxation in the real estate sector. The latter could be welcomed, but the adjustments proposed by the Ministry of Finance are cosmetic: increased taxes on the sale of real estate will still be easy to avoid, and the cost of owning square meters will not change for the vast majority of citizens — including the very rich. That is, innovations will not make the tax system more fair and will not contribute to the return of investment real estate to circulation, according to specialists from the analytical center “Real Estate Market Indicators IRN.RU”.

Let us remind you that the Ministry of Finance prepared and submitted to the government a bill on changes to the tax system, which, among other things, concerns real estate. The agency proposes to increase the tax rate for the sale of real estate: the current rate of 13% will remain up to the amount of 2.4 million rubles, and for everything that costs more, they will take 15%. At the same time, the increased tax will have to be paid not on the entire amount, but only on the difference between the purchase and sale, RBC reports.

This is the main point of the Ministry of Finance’s proposals, but in fact, this tax — either at a rate of 13% or at a rate of 15% — will not be necessary to pay at all. The fact is that the Ministry of Finance retains the current rule in the bill, according to which sellers who own real estate for three or five years (depending on the situation) are exempt from paying tax.

Note that, according to the Unified Information System of Housing Construction, the cost of new buildings in Moscow and on average across the country has doubled since May 2020. In the secondary market of Moscow, according to information from www.irn.ru, apartments have risen in price by 1.5 times over the same period. Thus, housing purchased 5 years ago can now be resold with a profit of 50-100% (or even more) and without paying a penny in taxes. And after the adoption of the bill developed by the Ministry of Finance, nothing will change in this regard.

The second proposal of the Ministry of Finance concerns increasing the cost of owning real estate for wealthy citizens. The issue has been brewing for a long time: for example, in Moscow the tax even on expensive apartments and houses (worth 100-200 million rubles) is a symbolic 0.3%. And the most unfair thing is that the tax base is determined in relation to each property, so even if a person owns several dozen apartments, valued at 10-20 million rubles. each, then he will pay only about 0.15%. This creates hothouse conditions for investors.

However, even here the Ministry of Finance bill does not change anything significantly. According to the document, only the maximum property tax rate is increased — from 2% to 2.5% — for objects whose cadastral value exceeds 300 million rubles. — there are not many such real estate even in Moscow. For everyone else, everything remains the same.

Thus, the upcoming tax reform is mainly limited to the final abandonment of the flat personal income tax scale, but practically does not increase the burden of owning real estate, including investment property. Considering that the stated goal of the reform is a fairer tax system, it would be more logical to do the opposite: leave personal income tax alone, increasing property taxes. First of all, for owners of a large number of apartments/houses, etc. Because an increased tax on good salaries will primarily hit highly qualified employees, that is, the middle class. But truly wealthy citizens do not pay personal income tax, but they own expensive real estate, and, as a rule, not in a single copy. And the maintenance of this real estate costs them practically nothing compared to its value and the annual increase in this value, and they can completely keep the profit from the sale of objects if they own them for more than five years.

This material is analytical and is for reference and informational purposes only.

source: IRN.RU