The reduction of the cadastral value of the object
What is cadastral value and what does it affect?
The cadastral value is the value of the real estate object established as a result of the state cadastral valuation.
The cadastral value is a fundamental component of the taxation system (in case the immovable property belongs to you on the right of ownership). In addition, if you are leasing real estate, the rent rate and the amount of rent payments directly depend on its cadastral value. An important fact is also the fact that since 2015 the cadastral value of the land plot has been taken into account when calculating an administrative fine.
Who determines the cadastral value and how?
On January 1, 2017, a new federal law on state cadastral valuation came into force. Now determine the cadastral value of real estate will be the state budgetary institutions by decision of the executive body of state power of the subject of the Russian Federation and in accordance with the guidelines on the state cadastral valuation.
The list of real estate objects subject to evaluation forms Rosreestr.
The evaluation is conducted no more than once in three years (in cities of federal significance - no more often than once every two years), and at least once every five years. An extraordinary state cadastral valuation is an exception.
The results of determining the cadastral value are approved by the authorized body of the subject of the Russian Federation. Then, information on the cadastral value is entered by Rosreestr into the Unified State Register of Real Estate.
It is noteworthy that in the function of budget institutions that determine the cadastral value, including:
1. Providing explanations related to the definition of cadastral value. In the event that mistakes made in determining the cadastral value are revealed during the consideration of the application for clarification, such errors are subject to correction and it is permissible to change the cadastral value determined after correcting such errors, only downwards;
2. Consideration of requests for correction of errors made in determining the cadastral value. Based on the results of consideration of such appeals by the budgetary institution, a decision may be made to recalculate the cadastral value in connection with the errors made in determining the cadastral value. In case of correction of such errors, the change in the cadastral value obtained after correction of such errors is allowed, only downward.
These measures are aimed at increasing the accuracy of the state cadastral valuation and reducing requests for review of cadastral value, which should satisfy the interests of rights holders of real estate.
Why is the cadastral value disputed?
The complexity of the assessment leads in some cases to an overestimation of the cadastral value or its disproportion in relation to the market value of the property. In addition, the increase in cadastral value is also explained by the principle of mass evaluation, which does not take into account the individual characteristics of the object. As a result, the overwhelming majority of private owners and tenants of state property are forced to bear unreasonable expenses.
The current legislation provides for the possibility of challenging the results of determining the cadastral value, the main purpose of which is to reduce the taxable base and the amount of payment of rent payments.
Challenging the cadastral value
The provisions of the new law provide that legal entities and individuals may challenge the results of determining the cadastral value in a commission specially established for this purpose (the Commission for the review of disputes on the results of the determination of the cadastral value created under the territorial Office of Rosreestr and operating on a permanent basis) or in court by filing The relevant application. To apply to the court, a preliminary appeal to the commission is not mandatory. In Moscow and the Moscow region at present, this category of disputes is under the jurisdiction of the Moscow City Court and the Moscow Regional Court, respectively.
Before applying to the commission and (or) the court will need to prepare a report on the market value of the property.
However, there are cases when challenging the cadastral value is not only not expedient, but also not profitable, since the cadastral value is reviewed every few years, and the costs of challenging its results can be quite significant.
Challenging cadastral value is often a rather lengthy and complex process, requiring a high level of knowledge and professionalism in this matter. Far from it always happens under the power of the rightholders of real estate. Therefore, we recommend that you consult this question with HEADS Realty specialists, who will help assess the feasibility of contesting the cadastral value, as well as the possible percentage, for which it can be reduced.