Recently, “Clerk” wrote about a completely wild story about how a man bought real estate for 200 thousand rubles and ended up with a tax of 2.5 million - and all because of the nuances with the cadastral value of buildings. To prevent such stories from repeating themselves, we decided to figure out what you now need to know about cadastral valuation and the value of the property you own.
Almost all of us, regardless of material and social status, are property owners. In this case, it doesn’t matter whether you own the notorious six hundred square meters in Malye Vasyuki or whether you own a couple of factories, an elite residential complex and your own mini-island. By the way, there are such collisions when the price of six Vasyukov hundred square meters suddenly turns out to be many times higher than all the oligarchic wealth combined.
In order to correctly calculate the price of real estate, the state is obliged to periodically (but not more than once every four years (once every two years - in cities of federal significance: Moscow, St. Petersburg and Sevastopol - author's note)) carry out a set of interrelated measures, which is a cadastral valuation of real estate. This is prescribed by the Federal Law of July 3, 2016 No. 237-FZ “On State Cadastral Valuation" (hereinafter referred to as Law No. 237-FZ). And to help it there are many other regulatory legal acts (NLA) of the federal and regional levels, which are designed to specify the stages of this long journey and the requirements for them.
Several years ago, the President of the Russian Federation harshly criticized the procedure for conducting cadastral valuation of real estate. He drew attention to the problem of objectivity, which is so characteristic of cadastral valuation. And - let's not keep the intrigue for long - it worked. It worked!
The President’s Address to the Federal Assembly dated February 20, 2019 contains the following words: “And of course, the land tax should be calculated fairly. It is clear that the cadastral or market value of the property may change. But in any case, the tax amount should not jump or change unpredictably. We have already limited the annual increase in tax payments for residential real estate to ten percent. I propose to set the same limit for land plots.”
Now the Russian government is really working to ensure that the principle of economic validity of cadastral value ceases to be a purely theoretical category and, finally, finds tangible embodiment in practice.
State Budgetary Institution – powers of state cadastral valuation institutions in 2021
So, from January 1, 2021, cadastral valuation of real estate is carried out in accordance with the provisions of the law of July 3, 2016 N 237-FZ (as amended on July 29, 2017) “On State Cadastral Valuation.” It wasn't always like this. Previously, the cadastral value was determined by third-party organizations on a competitive basis. Municipalities made a decision to conduct a state cadastral assessment, and then selected the work performers with whom they entered into a contract. This was provided for by the Law of July 29, 1998 N 135-FZ “On Valuation Activities in Russia”, which is still in force today, with the exception of a number of suspended articles.
What powers does the State Budgetary Institution have for cadastral valuation?
From January 1, 2021, the cadastral value is determined only by government organizations (GBU). The state budgetary institution for determining the cadastral value is created on the basis of an order or instruction from an authorized body of a constituent entity of the Russian Federation.
Thus, in each subject of Russia there is a government structure whose main functions and powers are:
- assessment of the cadastral value of real estate according to Law 237-F3 (in accordance with Article 14);
- determination of the cadastral value of newly created and registered objects;
- cadastral valuation of changed real estate objects (during an extension or demolition of part of a house, changing the area, etc.);
- collecting materials, processing data, as well as recording them on storage devices and storing information used during the cadastral valuation;
- providing Rosreestr with information obtained as a result of its activities.
Cadastral value: what is it, who assigns it, how is it contested in case of an error?
Cadastral value is the official price of certain real estate objects, which is determined by the state. This value was introduced to calculate the tax burden, as well as the amount of state duty for litigation or when inheriting real estate.
The difference between the cadastral price and the market price is that it remains unchanged for a certain period. For example, in cities of federal significance: Moscow, St. Petersburg, Sevastopol, cadastral assessment takes place once every twenty-four months. In other regions, this procedure is carried out at least once every 60 months, but not more than once every three years. Prices in the real estate market can constantly change under the pressure of certain economic influences. Due to price instability, taxes and duties are calculated based on the cadastral valuation.
The Cadastral Chamber has a network of branches throughout the country, where specialized specialists work. Local self-government bodies make a decision to conduct an assessment, then cadastrals determine the value of the object and carry out the procedure for approving the result of the determination. The final decision based on the results of the cadastral valuation is made by the executive state body of the constituent entity of the Russian Federation.
Any house or plot has its own price at which it is bought and sold. This is a market price and is determined individually for each property. Market pricing of real estate occurs based on the law on valuation activities.
The cadastral value of real estate is based on a mass assessment, which is carried out by specialists, following the principle of segmentation and division of objects into groups depending on the type of real estate. And also when carrying out work, the impact of economic reasons for pricing is taken into account.
Naturally, the cadastral value obtained using this method often differs from the market value and the owner may declare disagreement with the result of the assessment. After repeating the procedure, it is possible to change the cadastral value of the object either towards higher or lower prices.
Starting from the current 2021, the market value must be recalculated if it has been reduced by 30 percent or more since the date of the cadastral valuation. For this purpose, an unscheduled procedure for assessing cadastral value is provided. But, the results of the new check cannot exceed the previous ones recorded in the Unified State Register of Real Estate.
From Rosreestr you can obtain an extract from the Unified State Register of Taxpayers - such a certificate is issued within 3 business days. Property owners can find out the assessment results in their personal account on the departmental website.
The cadastral value can be recalculated if the following is included in the document:
- erroneous assessment of the condition of the building;
- the areas are indicated incorrectly;
- the materials from which the building was constructed were entered incorrectly.
The owner can challenge an erroneous cadastral value by requesting clarification from the regional office of the department. The response usually comes no later than 30 days.
To do this, you need to submit an application to the MFC. This can be done in person by visiting the institution and providing documents, or by email.
In the letter the applicant states:
- FULL NAME.;
- name of the legal entity;
- Address of the object;
- cadastral number;
- phone number and email for contact.
In the body of the document, the applicant explains the essence and reason for the application, and also attaches technical documentation confirming the presence of an error in the cadastral valuation.
The following should also be present here:
- extract from the Unified State Register of Real Estate;
- title documentation for the object;
- market value assessment report.
The application is considered within two months. But the result will not always please the applicant: recalculation may reduce the cadastral value of the property and the owner will have to contact the commission under Rosreestr.
In any case, the commission will make one of two possible decisions:
- He will reject the appeal, justifying his point of view to the owner of the object.
- Will make a decision on determining the cadastral value of real estate according to market valuation.
The departmental commission makes decisions only in the presence of at least half of the composition by open voting. For a positive decision, 50% of the votes are sufficient. In case of equality of votes, the decision is made in favor of the property owner. You can challenge the commission's decision in court.
Requirements for State Budgetary Institution specialists carrying out cadastral valuation of real estate
GBU employees who determine the cadastral value must meet the following qualification requirements :
- have a higher education in one of the fields: management, economics, mathematics, computer science, geoscience, biology, architecture, technology, applied geology, geodesy, mining, oil and gas, business, agriculture, forestry and fisheries;
- be unconvicted citizens of the Russian Federation;
- have experience in the field of determining cadastral value (from 3 years) - for those who sign the cadastral value report.
Requirements for employees of the State Budgetary Institution for cadastral valuation are prescribed at the federal level in Law 237-FZ, as well as in Order of the Ministry of Economic Development dated July 12, 2017 No. 177.
How to find out the methodology for determining cadastral value?
As we have already said, the regional state budgetary institution is responsible for the calculation and fair determination of the cadastral value. For example, in the Moscow region it is the Ministry of Property.
Therefore, in order to receive clarification on the calculation methodology, the interested person must submit an application. And the applicant must receive a response to the request within 30 days indicating the methodology for calculating the property, as well as pricing and other factors influencing the determination of the cadastral value.
Center for State Cadastral Valuation
GBU for determining cadastral value is often called the center of state cadastral valuation.
Indeed, on the territory of a subject of the Russian Federation, be it a region, a republic, a district or a region, there is one institution that determines the cadastral value - this is a kind of central apparatus operating in a certain territory. In each subject, these institutions have their own numbers, staffing, additional functions and powers, and also have an individual name.
For example, in the Leningrad region - State Budgetary Institution "LenKadOtsenka", In Crimea - State Budgetary Institution "Land Management [/anchor] and Cadastral Valuation", in Mordovia - State Budgetary Institution "Property Fund" but most often, for example, in Altai, Buryatia, Yakutia, Amur , Belgorod and other regions, the state-authorized institution for determining cadastral value is called the Center for State Cadastral Valuation.
Where does this information come from?
Sources of information are, for example, Rosreestr data, address digital plans and technical maps, archival information from technical inventory organizations.
That is, all information used in the calculation must be confirmed.
State Budgetary Institution specialists carry out the so-called evaluation zoning, i.e. dividing the territory into price zones. Such zoning is carried out only for those objects for which market information is available.
Next, a specific method is selected to calculate the cadastral value. Basically, a mass approach is used to estimate the cadastral value. All real estate objects are divided into certain groups, according to which the cadastral value is determined.
Therefore, if an object mistakenly falls into this group and is assessed using a mass approach, then errors cannot be ruled out.
In some cases, an individual approach may be used.
We are talking about particularly complex real estate objects with unique characteristics. An individual approach can be used in cases where it is necessary to determine the value of specific real estate objects in order to generate information about a certain segment of the real estate market.
Cadastral Valuation Data Fund
The Federal Cadastre and Cartography Service (Rosreestr) on its official website https://rosreestr.ru/ contains information on the assessment of cadastral value. This section of information is called “Cadastral Valuation Data Fund”. Here you can enter the cadastral number of your property (land plot, house) of interest and find out what the cadastral value of the property is, the date of the assessment, information about the results of the cadastral assessment.
In addition, you can find out when and where valuation activities are planned, as well as find out other information of interest about the cadastral valuation and the possibilities of challenging it. But not all information in the Cadastral Valuation Data Fund is freely available - some is hidden and accessible only to Rosreestr employees.
How is the cadastral valuation of real estate determined?
It is difficult for an ordinary person to calculate the exact value of the cadastral value of real estate.
The cadastral value is essentially identical to the average market value. Since such an assessment is determined for tax purposes, unlike the market price, it does not take into account factors such as the presence of luxurious renovations in the premises, wonderful and respectable neighbors, a landscaped yard with a front garden, etc.
At stage 1, preparation for cadastral valuation of real estate is carried out. Preparation includes collecting, processing and recording information about real estate objects.
If necessary, State Budgetary Institution specialists may need to conditionally combine several real estate objects into one formed object. For example, into a single production complex. Or you may need to divide the object into several parts for independent assessment.
But, in any case, the assessment should not lead to double taxation of objects.
At stage 2, the State Budgetary Institution collects so-called pricing factors.
Price-forming factors are various kinds of circumstances that influence the dynamics and price level. Pricing factors are systematized depending on the object of evaluation and are given in the Appendix to Guidelines No. 226.
For example, when cadastral valuation of buildings, structures, premises, parking spaces, the following factors are taken into account:
- area, as well as building density, i.e. the share of development of all buildings and structures to the area of the land plot;
- number of storeys;
- material of main structures;
- the “life” period of the object;
- when was the last time major repairs or reconstruction were carried out;
- capital of the object;
In turn, for this factor there are 5 groups:
1 - capital or especially capital object with an increased margin of reliability and strength;
For example, large industrial buildings, hydroelectric power stations, administrative and shopping complexes.
2 - capital object made of stone materials - concrete or brick;
For example, multi-storey residential buildings.
3 - object made of lightweight materials;
4 - an object made of light stone blocks and wood;
5 - light board, frame-sheathing objects.
For example, garden houses, bathhouses, garages.
- information about location and engineering infrastructure;
- description of communications.
Error correction
From January 1, 2021, an application to correct errors made in determining the cadastral value can be submitted within 5 years from the date of entering information about the cadastral value into the Unified State Register of Real Estate.
If the application for correction of errors is accepted, the cadastral value is recalculated due to errors made in determining the cadastral value, the budgetary institution is obliged to check whether the identified error was made in relation to other real estate objects, including neighboring, adjacent, similar ones.
If errors are identified, their cadastral value is also recalculated.
