Challenging the cadastral value of a land plot and building

Carrying out land valuation for entering the cadastre is regulated by the activities of government bodies on the basis of the Land Code of the Russian Federation, which includes a whole complex of comparative, costly and profitable approaches. A cadastral assessment is understood to mean a whole range of administrative and technical actions, which result in a cadastral value of a land plot as of the valuation date. Using this procedure, the market value of a particular territorial unit is calculated taking into account current prices for similar land plots. The resulting figure should not exceed the level of prices in the market. However, to date, cadastral value does not always conform to the normative rules of assessment. Quite widespread were cases when this indicator significantly exceeds the market value, which imposes a rather heavy tax burden on the landowner.

In accordance with the law, the established cadastral value serves as a standard and is subject to mandatory use. The disputing of the cadastral value of the land plot is made exclusively in a special order in full compliance with the current legislation.

How it's done?

When it comes to such a complex process, you should contact a specialized agency that will take care of all these issues. The disputing of the cadastral value of the land plot usually begins with the fact that an independent evaluation is carried out, and after that the client is provided with a report on the research conducted and the results obtained. The cost of such a service consists of a number of factors, in particular, the preparation of a report and the receipt of an expert opinion in the SRO for a document containing a report on land valuation.

The severity of the tax burden

In accordance with the Tax Code of the Russian Federation, the calculation of the tax base is in correlation with the cadastral value of the land plot, but one should not think that the taxpayer is subject to an actual tax burden that depends solely on the result of the state assessment. The tax code prescribes maximum land tax rates , which is 0.3% in relation to land plots:

- Allocated to the territories of agricultural purpose or to the lands belonging to the zones of agricultural designation in the settlements;

- employed by the infrastructure facilities of utilities utilities and housing stock, or purchased for the construction of housing;

- purchased for personal gardening, subsidiary farming, livestock or gardening, as well as dacha farms.

In relation to other lands and plots, the rate is a maximum of 1.5% of the cadastral value.

The amount of tax that taxpayers must pay is calculated by local self-government bodies. As prescribed by Article 387 of the Tax Code, the representative bodies determine the tax rates, as well as the procedure and term for their payment. Including for certain categories of taxpayers, the amount of the non-taxable amount is established. The Tax Code also stipulates that the tax should be established taking into account the ability of the taxpayer to pay the fact.

Necessity to challenge

Challenging the cadastral value of a land plot is sometimes required if an incorrect price determination has led to an increase in the tax burden. In recent years, many land and property owners have paid attention to the increase in the amount of taxes that are required to be paid.

In this regard, increased liabilities for taxes? To begin with, you need to remember how the amount of the property tax is determined. Its calculation is carried out following the results of the tax period in the form of a product of the corresponding tax rate and base, which is determined for the specified period. The payer can not directly influence the rate, but in the case of the tax base the situation is quite different.

Previously, the base for calculating taxes for real estate entities was calculated as an average annual cost, and now certain changes were made to the legislation, which led to a ban on this approach. Now, to calculate the tax base, the cadastral value of the property is used, which is approved in the established order. This is used in relation to such types of real estate organizations that are recognized as objects of taxation:

- commercial and administrative-business, as well as premises inside them;

- premises of uninhabited fund intended for accommodation of offices, public catering establishments, trade, consumer services, or actually used for the specified purposes;

- real estate objects belonging to foreign organizations that do not carry out activities in the territory of the Russian Federation through permanent missions, as well as real estate of foreign companies that do not belong to the activities of these structures in the Russian Federation.

In relation to land plots it is determined that for taxation it is required to determine the value of land by cadastre. This is why the cadastral value of the property acts as a tax base for the plots located within the municipality on whose territory the land tax is practiced.

In relation to the real estate of individuals - premises and houses, garages, parking spaces, unfinished construction projects, immovable complexes, other structures, buildings and premises, including commercial property - the tax on property of individuals is calculated in a different order, While it is determined based on the cadastral value of the object, although an inventory survey was previously used. The same approach will be used to calculate the tax on housing structures located on land plots that are provided for running dacha, personal part-time farming, as well as gardening, truck farming, construction of housing for individual purposes.

The contest process

In connection with all the above circumstances, it may be necessary to challenge the cadastral value of the property. To begin with, it should be pointed out that the rights of a person who are violated as a result of a discrepancy between the actual value of a real estate market inscribed in the state cadastre can only be protected by making corrections to the state cadastre.

Let's imagine some statistical data. The practice of contesting the cadastral value shows that in the nine months of 2014, all courts of the Russian Federation have filed more than 12,000 lawsuits involving disputes over the amount of cadastral real estate value entered in the state register with respect to twenty-four thousand objects. As a result of the consideration of these disputes, approximately seven thousand suits were satisfied, and this amounts to five percent of the total number of claims, the rest are either still pending or they have been denied satisfaction. All these data speak only about one thing - contesting the cadastral value of the land is a necessary action for its incorrect determination.

From the point of view of taxpayers, it is important to see the effect of such proceedings. Positive court decisions in favor of the plaintiffs led to a decrease in the tax base by approximately 93.5%. According to Russian legislation, the results of recalculating the cadastral value can be disputed in court to review the relevant disputes:

- by individuals, if the results obtained relate to their rights and obligations;

- legal entities, if the results obtained relate to their rights and obligations;

- bodies of local self-government and state power in relation to real estate objects that are in municipal or state ownership.

That is, the commission for contesting the cadastral value will consider applications of interested persons, owners or tenants of real estate.

Challenging in pre-trial order

To challenge the determination of value in court for individuals, it is not necessary to contact the commission in advance. For legal entities, there is as yet no unambiguous algorithm of action in this situation. The judicial contestation of the cadastral value in this case may be carried out by the person concerned. Legal entities are recommended to apply to the court in a very specific case. If the commission for contesting the cadastral value declined the application for review, it is possible to apply to a higher authority, in particular, to the court. It turns out that for legal entities it is absolutely not necessary to adhere to the existing pre-trial order.

If it is a question of applying to the commission, then it is required to submit a statement of claim on contesting the cadastral value with the relevant documents that are required for revision. With each management Rosreestre created and functioning commissions. It should be understood that challenging the cadastral value of real estate involves submitting an application within a period of not more than five years from the date of entering data into the state cadastre.

If the basis for filing an application is the unreliability of the information on the immovable property used in the process of determining the cost of the cadastre, then the commission has the right to take one of the following decisions:

- on the rejection of the application for review of the value in the event that the information about the real estate object used in the process was reliable;

- on the revision of the results in case of application of unreliable information used in the process of calculating the cost of the cadastre.

If the contestation of the cadastral value of the land plot is connected with the establishment of the value of the object on the market in the report, the commission will make the following decision: the cadastral value will be considered equal to the market value or the claim is completely rejected. In court it is allowed to challenge the decisions taken by the commission. In this case, the applicants' claims will be considered without taking into account the decisions previously taken by the above-mentioned commission.

Court order

It is worth noting that at the moment, the contest of cadastral value in the court is not the same as before. Since August 6, 2014, such cases have ceased to be dealt with by subordinate arbitration courts, but turned out to be the fiefdom of courts of general jurisdiction, and therefore went to the regional, city, and federal courts for consideration.

It was already mentioned earlier that judicial challenge to the cadastral value is now available to individuals and legal entities, as well as to government bodies. For such disputes, the territorial bodies of Rosreestr and FGBU for the subjects of the Russian Federation act as respondents. Correspondents or third parties in such cases may be the executive authorities of the subjects of the Federation or local authorities who ordered work on the calculation of the cost of the site.

The disputing of the cadastral value of the building can be made on the basis of:

- entering in the register of unreliable data on the object, which were used in the process of determining the cost of the cadastre;

- Establishment of its market value in relation to the real estate object on the date, according to which the cadastral value was determined (in this case, the determination of the value of the object on the market should be made on the same date as used to determine the value of the cadastre).

Revision of evaluation results

In order to determine the basis for the recalculation of the results, the applicant has the right to apply to the customer of the work in the event that the determination of the object value in the cadastre is related to the conduct of the state valuation or to the body entrusted with the state valuation functions, when it comes to newly registered real estate objects. A similar situation applies to objects that have changed their qualitative or quantitative characteristics, because of what is newly introduced into the state register.

If the contested cadastral value of a building, land plot or other type of real estate begins to be challenged, then within seven days from the receipt of the request, the applicant must receive relevant information from the customer of the work and the body responsible for determining the cadastral value. In addition, citizens have the right to apply to AIS services of the state cadastral valuation fund.

Requirements for Respondents

- Contesting the cadastral value of a site or building assumes that the information in the state cadastre will be deemed unreliable.

- Responsibility of the respondent after this will be the introduction of changes in the state cadastre.

- The valuation for contesting the cadastral value serves as the basis for the respondent to establish a new value equal to the market value of the property.

- The state registration body is obliged to make information on the new value of the real estate object equal to its value in the market to the state cadastre.

Database used

Challenging the cadastral value of the land assumes that the review process corresponds to the general rules of the claim process, which include rules for distributing the evidentiary burden between the defendant and the plaintiff.

If the plaintiff demands to review the cadastral value and to equate it with the market price, then he must prove that on the date of evaluation of his site there was another cost in the market.

The court may decide that the cadastral value will be fixed on the date that corresponds to the market valuation. The basis for determining the market value is the federal law on appraisal activity through the work of the appraiser and the preparation of a report. This report will become one of the admissible evidence on the disputes in court, where it will be considered for compliance with legislative requirements and federal assessment standards.

If the basis for filing a statement of claim to review the cadastral value of real estate is the market value established in relation to the object, then it is required to order an independent expert's assessment in advance. It will be carried out according to the contract, which is concluded between the customer and the appraiser. The result is a report on the market value, which is required to be included in the claim for review of the cost of the cadastre.

Results and Decision

The court is obliged to reflect the findings of the evaluation of the evidence of the decision, which will give reasons for the adoption of evidence as a means of substantiating the judicial conclusions. The rest of the evidence can be rejected by the court. And the grounds, according to which some evidence was given preference, should also be necessarily reflected in the final documentation.

So, if the order of contesting the cadastral value is observed, and as a result of the court consideration it was established that the value of the property belonging to the plaintiff in the cadastre does not correspond to the current market value, which was determined on the same date, the court will satisfy the claims of the plaintiff. As a result of the court decision, a new cadastre value will be established. Now you know how to deal with disputing the cadastral value.