To carry out any real estate transactions, you should know about the inventory value, as well as its difference from the cadastral valuation. The calculation takes place according to a special algorithm, which is used by the Bureau of Technical Inventory (BTI). You can calculate the tax amount yourself, but to do this you need to understand some concepts and terms that are relevant for the current 2019.
○ What is inventory value.
Inventory value is an indicator that is used when assessing real estate and calculating taxes on transactions with it. In this case, the total area of the living space, the degree of wear and tear and the conditions for the provision of utilities are taken into account. In this case, other criteria that determine the market value of this property are not taken into account. In this regard, the state decided to introduce a new method for assessing residential and non-residential premises, which will take into account all the necessary indicators.
An assessment of inventory value is needed when privatization of real estate is carried out, its purchase, sale and any other transactions are planned. It is also used to calculate property taxes. This indicator was the only one until January 2015, when a new assessment method was introduced.
○ What is cadastral value.
Cadastral value is the determination of the market price of a property or land plot. Its implementation is regulated by Federal laws:
- “On valuation activities in the Russian Federation” dated July 29, 1998 No. 135-FZ (hereinafter No. 135-FZ).
- “On state cadastral valuation” dated July 3, 2016 No. 237-FZ (hereinafter No. 237-FZ).
- “The cadastral value is understood as the value established as a result of a state cadastral valuation or as a result of consideration of disputes about the results of determining the cadastral value, or determined in the cases provided for in Article 24.19 of this Federal Law (Part 2 of Article 3 No. 135-FZ).
- For the purposes of this Federal Law, the market value of the valuation object is understood as the most probable price at which this valuation object can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and the transaction price is not reflected in any way. or emergency circumstances, that is, when:
- one of the parties to the transaction is not obliged to alienate the object of valuation, and the other party is not obliged to accept execution;
- the parties to the transaction are well aware of the subject of the transaction and act in their own interests (Part 1 of Article 3 No. 135-FZ).”
This indicator must be updated every 5 years and is necessary when purchasing and other real estate transactions.
How to conduct a property valuation - step-by-step instructions for beginners
When conducting assessment work, questions arise. Where to begin? Who should I contact? What if they count incorrectly? Do not worry!
Let's look at this procedure in order.
Step 1. Decide on the object and purpose of the assessment
First, let’s decide what and for what purpose we want to evaluate.
Objects can be any material goods, a collection or any components of property, services, information, as well as property rights and claims. It's quite simple! You can find out the value of any form of ownership.
With the goal, everything is a little more complicated. Here you need to formulate the assessment objectives as accurately as possible; the cost of the appraiser’s services will depend on this.
The objectives of the assessment are divided into mandatory (stipulated by legislation) and proactive (carried out by the interested party).
Mandatory concerns:
- state property;
- insurance of state property;
- lawsuits;
- taxation;
- division of property.
Initiatives are related to:
- execution of transactions;
- reorganization of enterprises;
- lending;
- rent;
- private property insurance.
A correctly formulated goal gives an advantage in choosing a method and approach to appraisal activities, which helps reduce the price of work performed.
Step 2. Select an appraisal company
We pay attention to the cost of services and the specialization of the appraiser. Cheap is, of course, good, but an erroneous conclusion about the price can cost much more. Therefore, compare prices for the same services from different companies.
Things that are dear to you may not correspond to their market value and vice versa! Experienced appraisers will declare their reputation and immediately provide preliminary advice regarding further work.
If you decide to contact a private company, be sure to request an insurance policy from the company and make sure that the company performing the assessment has at least two employees (a mandatory condition of Russian law).
Step 3. Arrange a meeting and conclude an agreement
Having decided on an appraisal company, you submit an application to carry out the work. This can be either an oral statement (telephone conversations) or an electronic form. The conditions are the same in both cases. It is necessary to provide your passport details, indicate the object and purpose of the assessment and set a convenient time for the work.
At the next meeting, an agreement is concluded - from this moment you enter into a legal agreement with the appraiser. To sign the transaction, you must have identification documents with you, as well as identifiers of the object and your rights to it.
After signing the contract, you must pay for the services of the appraisal company, which will further move forward the concluded agreement. This can be done at any bank branch or at the appraiser's office, provided that they issue you a cashier's check confirming the legality of the transaction.
Step 4. We provide the assessment object for inspection
Next, you must provide access to the property being assessed. A mandatory form of contract means that you must allow a specialist to inspect and study the property.
There is no need for your presence in the future. This task can be performed by a trusted person. You can draw up a power of attorney for free at the appraiser’s office. During the inspection, you may have to answer any questions that may affect the value of the property, so the trustee should be someone close to you!
The appraiser will draw up an inspection sheet, take copies of your supporting documents and set a date for finalizing the property appraisal report.
Step 5. Receive a work report
The conclusion is prepared, according to the law, no more than 3 days. It is prepared in writing and represents a report of the estimated value of the property.
Study the document and ask any questions that interest you. After explaining all the nuances, you sign the acceptance certificate of the property valuation document. This report, original or copy, is provided at the place of request.
At all stages of the work, you can consult with professional lawyers from the Pravoved company. You can count on support and resolution of the full range of legal issues at any time convenient for you.
Contact a specialist
09/18/2018 / Questions about assessment and examination / Leave a comment
○ What are the differences?
These two indicators are equally important for establishing the total value of real estate and calculating the tax on it. At the same time, it is necessary to know the differences between them. Below are the main indicators, the difference in which you need to know.
✔ Taxation.
The amount of taxes depends on the established value of the property. When taking inventory, the year of construction of the building and the degree of its wear and tear are taken into account.
- “The tax base is determined in relation to each object of taxation as its inventory value, calculated taking into account the deflator coefficient based on the latest data on inventory value submitted in the prescribed manner to the tax authorities before March 1, 2013 (Article 404 of the Tax Code of the Russian Federation).”
As for the cadastral value, when calculating the tax base, it is determined by deducting a certain number of square meters from the total area, based on the type of property:
- For an apartment – 20 sq. m.
- For a room - 10 sq. m.
- For a residential building - 50 sq. m. (Article 403 of the Tax Code of the Russian Federation).
Until January 2015, the amount of taxation was established only on the basis of inventory value, and starting from 2015, the state is gradually switching to cadastral value, which by 2020 should become the only criterion for calculating tax.
✔ How it is calculated.
When determining the inventory value, only the construction time of the building and the price of the building materials used are taken into account. The assessment is carried out by specialists from the Bureau of Technical Inventory (BTI). This calculation does not allow determining the actual market value of real estate, which led to the need to introduce cadastral value, which takes into account:
- Location of the building (locality, district and street).
- Infrastructure development (presence of kindergartens, schools, hospitals, public transport stops nearby, etc.).
- Availability/absence of own parking and/or security and other factors affecting the market value of the property.
The cadastral value is determined by independent appraisers hired by the local government
✔ Difference with market price.
Taking into account the criteria that are taken into account in the calculation, the cadastral value is as close as possible to the market price. The difference in this case is 1.5-3 times. As for the inventory value, the difference from the market price of real estate is approximately 10 times. That is why the amount of property tax is based on the cadastral value, starting in 2015. It is planned that by 2021 the state will completely switch to calculating taxes based on cadastral value.
✔ Who issues.
BTI is the body that determines inventory value. You can apply here to receive this particular type of assessment. As for the cadastral value, its assessment can be obtained by contacting Rosreestr, the Cadastral Chamber and the MFC branch.
✔ Who can get it.
Each type of certificate with the required assessment can only be obtained by the owner of the property or his representative who presents a notarized power of attorney.
When applying for information you must present:
- Personal passport.
- Title documents for real estate.
- An application completed in the prescribed form.
- Receipt for payment of state duty.
✔ How to get it.
You can obtain an inventory assessment by contacting the BTI in person and presenting the listed package of documents. As for the cadastral document, it can be ordered online at Rosreestr or by contacting the MFC branch with presentation of title documents.
✔ How to dispute.
If the applicant does not agree with the amount of the assessment given, he can challenge it by appealing to the courts in each case. At the same time, you can challenge the inventory value at any time after receiving it, and in the case of a cadastral valuation, the claim must be filed no later than 6 months after receiving the document.
✔ Assessment procedure.
Algorithm of actions during inventory assessment:
- Determination of the basic replacement cost of the object.
- Recalculation taking into account current year prices using special coefficients.
- Determination of the percentage and cost of physical wear and tear.
- Calculation of actual inventory value.
- Tax calculation by multiplying the assessment result by an adjustment factor determined within a certain period.
This type of assessment takes quite a long time and requires a certain scrupulousness.
Determining the cadastral value is faster:
- The administration makes an appropriate decision on revaluation.
- A list of objects subject to revaluation is compiled.
- An independent company is hired on a competitive basis.
- A cadastral assessment is carried out in accordance with current coefficients and the regulatory framework.
- An examination of the compiled report is carried out by self-regulating appraisers.
- Information is transferred to local government bodies and published
- Updated data is recorded in a single database.
✔ Revaluation.
BTI specialists are required every year before March 1 to provide information on the inventory value of their objects as of January 1 of the corresponding year. As for the cadastral value, its revaluation is carried out every 5 years.
Thus, the inventory value should also be known to the owners of the living space. Information about each type of assessment together gives a true picture of the value of the property.
Calculation by algorithm
The main indicator for calculating the inventory valuation is the replacement cost of real estate. The assessment has been used since 1970, and experts have supplemented it with amendments and various coefficients. The calculation algorithm and all real estate data are in the BTI.
To correct the data, the estimated cost of one square meter is used, which is multiplied by a certain coefficient. It is constantly changing and is subject to amendments adopted by authorities on a quarterly basis. The inventory value of the property is the difference between the amount and depreciation of the building, which are calculated using formulas.
Basic methods
Cost calculation is carried out using one of the inventory methods, which include: comparative, cost and income.
The first method compares the main characteristics of real estate of similar properties that have been sold recently. However, the method is not accurate as it provides approximate data on the value of the property. The cost method takes into account the approximate cost of building materials and engineering structures. In addition, the cost of the land plot on which the building is erected is taken into account.
The income method is rarely used, since when calculating the value of real estate, the following aspects are taken into account: area, rent, payment of utilities, as well as its maintenance. It is used in cases where there is not enough information about the object to determine the inventory value.
The difficulty of the calculation lies in the lack and inaccessibility of information for public use. However, if desired, all the necessary information and coefficients can be found out. There is a certain algorithm with which the inventory value of an apartment (C) is calculated.
It is used by BTI specialists for the following tasks:
- Find out the replacement cost of a house (apartment), information about which can be found in specialized literature (St).
- Determine the physical depreciation of real estate. You can use the latest inventory data.
- Using the coefficient (Ci), which is taken from the BTI documentation, calculate the current cost of wear and tear (Ifiz).
- Calculate tax values for the required date.
The inventory cost of an apartment is calculated using the formula: Si = St * (1 - Ifiz / 100 * Ci). It is quite complex, since finding out some data is quite problematic, but possible. The values of Si, St and Ifiz are measured in rubles. There is a simplified version of calculating tax, which should be analyzed using an example.
