How to reduce the cadastral value of a land plot

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A reduction in the cadastral value of a land plot may be necessary for its owner for various reasons. But all these cases are united by the fact that some actions are being taken with the land plot. If the owner of the land simply built a house on it and lives there, then he is not too interested in the cadastral value. But if he decides to sell a house with a plot, the question of value, established according to certain rules and regulations, immediately arises. The issue of cost is also of concern to those paying rent and taxes. If you can reduce the cost, then you can reduce your tax liability and rent.

On what grounds can you ask to reduce the cadastral value of a land plot?

The cadastral value is determined by the authorized body, according to the rules established by the law “On Valuation Activities in the Russian Federation”. At the same time, the very result of land valuation activities can be appealed in an arbitration court, and individuals do not have to first contact a commission specially created for such disputes.

Reasons for revision may be:

• Use of false information by the appraiser;
• Determination of market value different from cadastral value for the same date.

How to reduce cadastral value

By eliminating errors that were made during the state cadastral assessment of land plots.

The cadastral value turns out to be overestimated if arithmetic errors, typos, or methodological errors were made during the state cadastral valuation. To eliminate such errors, it is necessary to submit an appropriate appeal to the budgetary institution that carried out the state cadastral valuation. The application must indicate the cadastral number of the land plot, information about the applicant, and information about mistakes made. Documents confirming the presence of errors must be attached to the application.

The budgetary institution must consider the application within 30 days from the date of its receipt. If necessary, a budget institution may extend the period for consideration of an application for another 30 days.

At the same time, based on the results of consideration of the appeal, the budgetary institution does not have the right to increase the cadastral value (Part 16, Article 21 of the Federal Law of July 3, 2016 No. 237-FZ “On State Cadastral Valuation”).

If a budget institution refuses to correct an error made in determining the cadastral value, this refusal can be challenged in court (Part 22, Article 21 of the Federal Law of July 3, 2016 No. 237-FZ “On State Cadastral Valuation”).

Consideration of the issue of land value in the commission

To consider this type of dispute, the legislation provides for the possibility of creating special commissions where the results of assessing the value of a land plot are disputed, which are then entered into the state register. Only an interested person who is directly related to the land plot can submit an application to such a commission. This can be a company or a citizen, as well as a government agency or self-government body. Most often these are owners and tenants ; it is in their interests to reduce the cadastral value of a land plot.

The applicant may try to change the cadastral value for no more than five years from the date of its entry into the state register. To support his words, the applicant can submit a request to the body that conducted the assessment about the information that was used to compile the cadastral value of the site.

The application for revision of the cadastral value must be accompanied by:

• A certificate of cadastral value, which confirms the figures entered in the cadastre;
• A document of title to the land, and its copy must be notarized;
• Evidence of the use of false information or a report on the market value of the property at the time of determining the cadastral value, together with a positive conclusion on it from the SRO appraisers.

Based on these and other documents, the commission makes its decision, but it can be challenged in court.

If it's expensive and unfair. How to reduce the cadastral value of real estate. Expert advice

Where do the unrealistic numbers come from?

The cadastral value is established during the state assessment; this is done by state budgetary institutions (GBU). The work of specialists is always carried out remotely, without visiting the site (this is even physically impossible to do during a mass assessment of real estate), and therefore often does not take into account the specific features of the property, notes Sergei Volosnikov.

Sergey VolosnikovProvided by ANO NEB

In the Sverdlovsk region, the State Budgetary Institution SO "Center for State Cadastral Valuation" in 2021 assessed capital construction projects: buildings, premises, structures, unfinished construction, parking spaces. The assessment of land plots was carried out this year and will take effect in 2021.

Why is it so important to know about the cadastral value of a property?

The amount of property tax depends on its size. In addition, it affects the amount of rental payments for the use of state or municipal property. Therefore, the sooner you start correcting the error, the better.

Jaromir Romanov / Znak.com

How do you know how much you counted?

Information about how much the property is valued is recorded in the Unified State Register of Real Estate. At the first stage, after the cadastral assessment, 50 days are given to familiarize yourself with the draft report of the State Budgetary Institution. The draft report can be downloaded on the State Budgetary Institution website or on the Rosreestr website in the “State Cadastral Valuation Data Fund” section.

But we must warn you that searching for data is not as simple as it might seem. The report weighs tens of gigabytes: the document consists of several volumes and dozens of attachments. Even simply downloading such a document takes many hours. It is even more difficult for owners or tenants who are far from professional assessments to analyze such an array of data themselves, understand the calculation model, and then formulate comments.

What are the mistakes?

Claims must be justified, warns Sergei Volosnikov. They may indicate errors in the report or erroneous information about the characteristics of the property. State Budgetary Institutions post information on their website about comments received and comments from their side. When taking into account the comments, the State Budgetary Institution recalculates the cadastral value. And not only the object you need, but also others - neighboring or similar ones, in determining the value of which a similar mistake was made.

After the “grace period” has expired and after the results of the cadastral value have been approved, there remains one more budgetary opportunity to correct the cadastral value - if a typo, arithmetic or other error (possibly even methodological) is discovered in the report, which ultimately distorts the value of the cadastral value. In this case, you must contact the State Budgetary Institution or a multifunctional center with an application to correct errors made in determining the cadastral value.

Nail Fattakhov / Znak.com

They didn't hear you. What's next?

If the comments sent to the State Budgetary Institution are not taken into account and errors cannot be identified, you will have to move on to the next stage - start a dispute about the results of determining the cadastral value. To do this, you will have to involve an appraiser who will determine the market value of the property and draw up a report. And then there are two options: filing an application with a specially created commission or filing an application with the court.

The state does not like to admit its mistakes

The special commission that considers complaints about cadastral valuation includes eight people. In addition to officials and the business ombudsman, there are two representatives of the appraisal community, a representative of the Sverdlovsk Regional Union of Industrialists and Entrepreneurs, and a member of the employers' association - the Sverdlovsk Regional Union of Industrialists and Entrepreneurs. An appraiser's report must be attached to the application submitted to the commission.

Members of the commission study the report and make comments. Then a meeting is scheduled, to which the copyright holder, as well as a representative of the State Budgetary Institution, are invited. The participation of an appraiser is possible. At the meeting, the comments identified in the assessment report are voiced (usually most of them come from a representative of the State Budgetary Institution), after which all members of the commission present vote. The decision is made by a majority vote. Then it is published on the website of the Ministry of State Property Management of the Sverdlovsk Region.

“One of my fellow evaluators analyzed the work of the commission over six months and found that some members of the commission always vote against it. As a result, as paradoxical as it may sound, more than 80% of reports from professional appraisers are not taken into account. Members of the commission state that they do not comply with the assessment methodology and contain errors,” says Sergei Volosnikov.

last hope

After the commission makes a negative decision on the complaint (and this happens in the vast majority of cases), the only option left to reduce the cadastral value is to file an administrative claim with the Sverdlovsk Regional Court. In principle, you can go to court immediately, without going to the commission. When considering a dispute in court, administrative defendants and the State Budgetary Institution can also draw up comments on the report on determining the market value. After which the court will probably order a forensic examination and the final market value will be determined by a forensic expert.

Innovations

In August 2021, several changes to the law on state cadastral valuation No. 237-FZ came into force. Thus, from January 1, 2023, Article 22 “Consideration of disputes regarding the results of determining the cadastral value,” which defines the procedure for challenging in special commissions, loses force. That is, the current special commissions will be abolished. Instead, Article 22.1 “Establishing the cadastral value in the amount of the market value” appeared, suggesting an out-of-court procedure. That is, the complaint will be considered by the State Budgetary Institution itself. A transition period has been established until 2023, during which the head of the region can decide on an earlier transition to the new order.

Thus, an out-of-court procedure becomes mandatory, and only after a refusal by the State Budgetary Institution can you go to court.

Now the cadastral valuation will be carried out every four years, which means there will potentially be the possibility of new errors. Two campaigns will take place in the next two years. Thus, in 2022, all regions must conduct a mandatory cadastral assessment of land plots, and in 2023 - an assessment of capital construction projects

Challenging the cadastral value through court

Individuals can file a claim directly in court, but legal entities must go through the procedure of challenging the cadastral value in the commission, and only if they were refused there, then go to court. The entire process is conducted in accordance with procedural law. To draw up a claim and represent it in court, you can hire a lawyer on land issues, then all procedural aspects will be carried out exactly as required by law, which will allow the court to directly deal only with resolving the issue on the merits, without being distracted by correcting formal errors.

Certificate of change in the procedure for challenging the cadastral value of real estate from 2021

In August 2021, the Federal Law of July 31, 2020 No. 269-FZ “On Amendments to Certain Legislative Acts of the Russian Federation” came into force, concerning the improvement of state cadastral valuation, hereinafter referred to as the “Law”.

According to the Law, a new procedure and deadlines for determining the cadastral value of real estate (including land plots) are established. The procedure for establishing the cadastral value of real estate in the amount of the market value has also changed.

The main changes are those made to the Federal Law of July 3, 2016 No. 237-FZ “On State Cadastral Valuation” (hereinafter referred to as the “FZ “On State Cadastral Valuation”).

Property owners should pay attention to the following changes:

1. The procedure for filing applications to correct errors made in determining the cadastral value has been preserved (Article 21 of the Federal Law “On State Cadastral Valuation” is set out in a new edition and comes into force on January 1, 2021).

Non-compliance of the determination of cadastral value with methodological instructions or almost any other error that affected the value of the cadastral value of one (single error) or several objects (system error) of real estate can be corrected upon application for correction of errors made in determining the cadastral value (clause 17 of Art. 5 Federal Law “On State Cadastral Valuation”).

Any interested person will have the right to submit such an application to a budgetary institution or MFC. The application review period is 30 calendar days.

The novelty is the norm of paragraph 15 of Art. 21 of the Federal Law “On State Cadastral Valuation”, which obliges a budgetary institution, in the event of a decision to approve an application for correction of errors, to check for possible errors in relation to other real estate objects, including neighboring, adjacent, and similar ones. If new errors are identified, the cadastral value of such objects is also recalculated.

In case of refusal, the decision of the budgetary institution, as a non-normative act, can be challenged in court through administrative proceedings.

2. At the same time, a new procedure for establishing the cadastral value in the amount of the market value is being introduced (clause 19 of Article 5 of the Law). They will be supplemented by a new article 22.1 of the Federal Law “On State Cadastral Valuation”. In fact, the pre-trial procedure for challenging cadastral values ​​has been reintroduced.

The interested party submits to a budgetary institution or MFC an application to establish the market value accompanied by a report on the assessment of the market value of the property.

At the same time, the application can be submitted at any time from the date of registration of the property with the cadastral register and until the date of its removal from the cadastral register, but within 6 months from the date as of which the market valuation of the property was carried out and which is indicated in the report on assessment. Thus, actually for the current date within six months.

The budgetary institution reviews the application within 30 calendar days and makes a decision either to establish the cadastral value of the property in the amount of its market value, or to refuse it.

The decision of a budgetary institution, as a non-normative act, can be challenged in court through administrative proceedings. Simultaneously with challenging such a decision, a demand may be submitted to the court to establish the cadastral value of the property in the amount of its market value.

With regard to land plots located in Moscow, St. Petersburg and Sevastopol, a new rule is being introduced, according to which a decision to establish the cadastral value of a land plot in the amount of the market value can be challenged in court by a local government body, a government body of these entities if, on application owner of the land plot, its cadastral value was significantly reduced (clause 17, article 22.1 of the Federal Law “On State Cadastral Valuation”).

3. No less important is the introduction of personal responsibility of the management of a budgetary institution for making decisions to refuse to recalculate the cadastral value under Art. 21 Federal Law “On State Cadastral Valuation” (clause 5 of Article 5 of the Law).

If the courts have reviewed 100 or more “refusal” decisions of a budgetary institution during a calendar year, and the share of such decisions exceeds 20% of the total number of decisions of the budgetary institution, the employment contract with the head of the budgetary institution is subject to termination at the initiative of the employer (the relevant authority). In this case, court decisions on review that have entered into legal force are taken into account.

4. Another novelty of the Law is a new mechanism for revising the results of the state cadastral valuation in the event of a serious decline in prices on the real estate market (clause 15 of Article 5 of the Law, the Federal Law “On State Cadastral Valuation” is supplemented by Article 19.1 “Real Estate Market Indices”).

The budgetary institution will annually, as of January 1, calculate the real estate market index based on a comparison of cadastral and market values. If it decreases by more than 30% compared to the value of the real estate market index of the year following the year of the last state cadastral valuation, the budgetary institution will change the current cadastral value of real estate, except in cases where the cadastral value is set at the market value by its multiplied by the real estate market index.

To do this, you do not need to incur any expenses - Rosreestr will independently determine the value of the index and, in the event of a significant decrease, apply it.

5. The law (in paragraph 6 of Article 5) defines the procedure for making a decision on conducting a state cadastral valuation (hereinafter referred to as the “GKO”).

According to the Law, GKOs are carried out every 4 years, and in cities of federal significance every 2 years if the authorities make an appropriate decision.

The decision to conduct a State Defense Contract is subject to official publication, including posting on the official websites of authorized bodies.

Starting from 01/01/2021, a rule has been introduced according to which a budgetary institution creates a preliminary list of real estate objects subject to state bonds (Clause 10, Article 11 of the Federal Law “On State Cadastral Valuation” in the new edition).

In the process of preparing for the GKO, the owner of the property has the right to submit a declaration on the characteristics of the property in the manner established by Order of the Ministry of Economic Development of Russia dated June 4, 2019 N 318 “On approval of the procedure for considering the declaration on the characteristics of the property, including its form.”

6. When determining the cadastral value of real estate, a budgetary institution is obliged to take into account all the factors provided for by the guidelines on state bonds, as well as take into account the information contained in the declaration. This conclusion follows from the text of the declaration and paragraphs 1-5 of Art. 14 Federal Law “On State Cadastral Valuation” in the new edition.

After a budgetary institution has compiled a draft report based on the results of determining the cadastral value and its approval by Rosreestr, the authorized body of the subject publishes the report, including on the official website, with information on the procedure and deadlines for submitting comments.

Comments on the draft report can be submitted to a budgetary institution or MFC or through the public services portal by any person during the period for posting the draft report.

After all comments have been taken into account, an updated version of the report is published.

7. The authorized body of the constituent entity of the Russian Federation, on the basis of the report, within 20 days from the date of its receipt, approves the results of determining the cadastral value contained therein by adopting an Act on approval of the results of determining the cadastral value (Article 15 of the Federal Law “On State Cadastral Valuation” as amended). The act is also subject to publication in the media and on the official website of the authorized body.

The act comes into force 1 month after the day of its official publication.

8. Meanwhile, until January 1, 2023, the Law establishes a transition period for the application of Articles 22 and 22.1 of the Federal Law “On State Cadastral Valuation” on the pre-trial procedure for challenging the cadastral value.

During this period, the executive body of a constituent entity of the Russian Federation may decide on the date of transition to the application of the provisions of Article 22.1 (on establishing the cadastral value in the amount of the market value) of the Federal Law “On State Cadastral Valuation” (clause 2 of Article 6 of the Law).

During the transition period, the provisions of Art. 22.1 of the Federal Law “On State Cadastral Valuation” do not apply.

Reducing the cadastral value of a land plot: advantages

The procedure discussed in this article is primarily beneficial in that after such a reduction, the tax obligations of the owner of such a plot are reduced. This is especially true for those individuals who own large areas of land, and the tax per square meter is very high.

Let's take the average cadastral value of land in Moscow for comparison. In some of its areas the cost is approximately 18,000 rubles; in old areas it can be much more, and in new areas it can be much less.

Judicial practice demonstrates that the cadastral value of a land plot can be reduced by a factor of three if there are real and significant grounds and experience and qualifications of a lawyer.

For example, let's take a plot of land measuring 0.1 hectares.

Consequently, the savings after reducing the cost of the site in just one year will amount to 180 thousand rubles! This is a fairly serious reason to take the necessary steps to lower the cadastral price.

Help from specialists

Reducing the cadastral value of a land plot is an action associated with certain knowledge of regulatory documents. Therefore, the help of a good specialist in this matter will not hurt, but on the contrary, it will be very useful.

Lawyer Murzakova E.M. – an experienced lawyer who has been working on land matters for many years, including issues related to the reduction of the cadastral price of a land plot. Assistance from lawyer E.M. Murzakova will be needed:

• during preparatory activities to reduce costs, including the collection of necessary documents;
• when considering an application in authorized bodies, including when the application is refused;
• if necessary, apply to the courts in order to declare decisions and actions of third parties illegal, as well as in order to obtain a judicial act to reduce the cadastral price;
• under other, including unforeseen, circumstances.

If you are interested in the prospect of reducing your land maintenance costs, we are waiting for a consultation.

Return to the section Support of transactions for the purchase and sale of real estate

The rating will be corrected

Innovations will make it possible to implement the requirement of the 2018 Presidential Address, which talks about eliminating “excesses” in the assessment of citizens’ real estate.

“Any methodological error in determining the cadastral value should be interpreted in favor of the owner,” State Duma Speaker Vyacheslav Volodin commented on the amendments. “Such mistakes, intentional or accidental, always cost money and nerves.”

In this regard, the new law, he noted, will oblige the erroneous cost to be reduced retroactively, from the first date of its entry into the Unified State Register. “This will make it possible to demand a recalculation of tax payments for the entire period of validity of the erroneous entry,” Volodin emphasized.

In addition, it will become easier to challenge the cadastral value in pre-trial proceedings. To do this, it will be enough to send the corresponding request through the MFC. If even one error is detected, state budgetary institutions in the regions will be required to check and correct errors for other similar objects.

The bill provides a new and convenient mechanism for correcting errors, Deputy Head of the Russian State Register Alexey Butovetsky emphasized at the plenary meeting. He cited the example of a gardening partnership that does not agree with the cadastral valuation of its property. According to current rules, all gardeners must engage in contestation. And after the amendments are adopted, “it will be enough for one person to go and prove that there is an error regarding one plot of land.” And then a recount will be done for all gardeners, the official noted.

According to the document, Rosreestr will conduct constant supervision over cadastral valuation. In addition, the heads of institutions in this area will be personally responsible for the outcome of the assessment and whether errors are corrected. In particular, they may be fired if during the year the court repeatedly grants claims to challenge the cadastral value.

The results of the assessment will be reviewed publicly, and changes will not be made without such an open procedure. This will reduce the influence of regional authorities on state cadastral institutions, the explanatory note says.

The cadastral value is sometimes several times higher than the market value

The issue of unfair assessment is important for both citizens and businesses. “Today, the cadastral value is sometimes several times higher than the market value,” noted United Russia deputy Yuri Smirnov. “And you have to pay taxes from the first.” During the pandemic, this created an additional problem for business, he noted.