How to do this: reducing the cadastral value of real estate

In the crisis, the business think about reducing costs, including the reduction of fiscal benefits. The cadastral value of the property owned by the company, affect land tax and property tax. Also the cadastral evaluation is to determine the amount of rental payments, if the municipal authority is losing her lease of land, building or premises.

Today the cadastral value of the property is determined by the state in the course of mass valuation based on market information and data related to the economic characteristics of the object. This is a contest and a contract with a private appraisal company, whose experts carry out all necessary actions without leaving the place. Because of this often do not take into account the individual features of an object (accessibility, current status, etc.), which leads to errors.

From 1 January 2017, following the adoption last week by the state Duma of the new law, the cadastral value will be determined by a specially created public institutions. Them property owners in advance to provide the Declaration about the characteristics of their objects for the correct determination of cadastral cost, and in the future and to send their comments to the interim report. There the owner will be able to handle a request to correct a technical or methodological errors in the assessment.

The Commission, with the Federal registration service(e

Now for legal persons preliminary application to the territorial Commission for the examination is mandatory and is a pre-judicial order of settlement of dispute. For individual entrepreneurs this is optional: they can apply immediately to the court. However, from 1 January 2017, when it will come into force the law “On state cadastral evaluation”, the need for mandatory pre-trial appeal to the Commission is no longer legal entities.

Starting in 2016, only in Moscow the Commission at the Rosreestr has been considered about 300 applications for review of the state assessment and only 50% of them were satisfied. Cadastral cost of objects is usually by decision of the Commission was reduced to 1.5–4 times.

The application for review must be accompanied by a certificate of the cadastral value of the property, a notarized copy of the legal document, the report with positive expert opinion of the SRO (self-regulatory organization of appraisers. It is important not only to provide the necessary documents, but also seriously approach to the selection of the appraisal company. How long has she been on the market? How successful she was involved in similar cases earlier?

Appeal to the court

If the Commission has not brought results, you should go to court. The examples show that often the business are able to reduce the national assessment in two or three times!

Thus, JSC “Ural-Plastik was able in court to reduce the cadastral value of the land from 5.2 million to 2 million rubles (determination of the Supreme Court of 19.08.2015 No. 48-АПГ15-52). A state assessment of a land plot belonging to JSC “Sibneftegas”, were initially established in the amount of 19.1 million RUB. In court, the society managed to reduce this value to 7.9 million rubles (determination of the Supreme Court of 02.09.2015 No. 89-АПГ15-3).

An important caveat: requirements on challenging the results of state cadastral valuation are not subject to the joint consideration of other requirements — for example, the revision of tax liabilities, lease payments, etc. will Have to do it consistently.

It is also important that the market value of the property was established on the date on which it is installed the cadastral value. Otherwise, the court will not consider the application. Thus, JSC “Printservis” appealed to the Commission under the Federal registration service in the day, when it approved the new cadastral estimation of the belonging of the object. In the court the society has applied for challenge cost, obsolete. The proceedings were discontinued (appeal ruling of the Moscow city court on the case 08.07.2015№33-21029/2015, 3-298/2015).

It should be borne in mind that the court has the right to increase or decrease the market value of the object. This may be assigned to a judicial assessment examination. It invited experts assess the object and check the impugned report on compliance with the law.

If the court-appointed expert has doubts, the applicant may give him a challenge and ask the court for examination of a specific appraiser (appraisal company). In addition, if you disagree with the results of the initial forensic examination can apply for re-appointment, additional tests.

Who can apply to the court?

To court with a claim for revision of cadastral cost can contact the owners of the property (both legal and natural persons) and other persons, if the results of the cadastral assessment affected their rights and obligations. The resolution of Plenum of the Supreme Court of the Russian Federation from 30.06.2015 the No. 28 clarifies who belongs to such persons. So, even a former property owner may apply for reconsideration if the assessment by the state affects his rights as a taxpayer, as the tax is charged over the period of tenure.

If the object is in shared ownership, any participant has the right to review cadastral value irrespective of the consent of other co-owners. This court reviewed the assessment of the entire facility and not share.

Organization with the exclusive right of buying or leasing a land plot in state or municipal ownership, shall be entitled to challenge its cadastral value, if the redemption price or rent is based on this evaluation. It does not matter, what is the term of a lease.

If the rent for the use of property is calculated from the cadastral value, the lessee is entitled to challenge it in the case when consent of the owner for such actions expressed in the contract or in another written form.

Businesses should assert their rights, including challenging the state cadastral assessment. Judicial practice and our experience suggests that the chances of a positive outcome are quite high.

The authors ‘ point of view, articles which are published in the section “Opinions” may not coincide with ideas of editorial.