Tag Archives: local government

Helping developers

“Helping developers” (“Zastroyshchiku pomogli”), Ekspert Ural 6 (408), 15 February 2010. 1 July 2010 http://www.expert.ru/printissues/ural/2010/06/news_zasrtoischiku_pomogli/.

Report on the Ekaterinburg city Duma’s decreasing the rates on yearly taxes paid by developers owning land plots occupied by multi-story buildings, from 0.1% to 0.06% of the land’s Cadastral value. This will affect 108 privately-owned land plots in the city (the largest portion of which are held by development firm “Renova-Stroygrupp”), including many in the sizable Akademicheskii region (9,000 m2) under development now. This will free up vast amounts of money for many firms: taxes incurred by Akademicheskii developers will drop from 52 to 31 million rubles, for instance; small firms will benefit, too. Some are raising their voices against the “privileges” (e.g. special buy-out prices) being afforded to large developers, mistrusting Duma deputies’ claims that the Akademicheskii region is primarily being built for accessible, low-cost housing, or alternately, that it will catalyst greater economic growth in the region.

Note: Other various articles (since February) have reported the general success of the first Akademicheskii regions to open.

In Volgograd, municipality will cooperate with industrial enterprises in buying out land plots

“In Volgograd, municipality will cooperate with industrial enterprises in buying out land plots” (“V Volgograde munitsipalitet okazhet sodeystvie promyshlennym predpriyatiyam v vykupe zemel’nykh uchastkov”), Zem.ru, 28 September 2009.  26 July 2010 http://www.zem.ru/all/825/.

The state of land reform in Volgograd.  The Volgograd municipality is offering a discount price on land buy-outs, if purchased by enterprises before the end of 2009; the relative stability of land tax rates, as opposed to more in-flux lease payments, is another incentive to buy out, the article adds.  The city administration is encouraging full privatization of land since land taxes on private land help fill the city budget.  The 400 hectares of federal land, on which 15 large industrial enterprises are currently situated, currently add some 123 million rubles to the city coffers annually; if reformulated as rents from the federal government, the city will lose these monies.  Committee on land resources chairperson Irina Anisimova is pleased that 80 new enterprise land privatizations in 2008 were added to the total 290 privatized industrial land plots, though she realizes this momentum must be sustained.  Although city administration affirms its readiness to cooperate with enterprises in quickly formulating buy-out documents, disparities between Cadastral appraisal prices and market prices are sure to fuel disagreements over buy-out prices.

Land taxes increase 50 times over

“Land taxes increase 50 times over” (“Zemel’niy nalog podorozhaet v 50 raz”), Agentstvo “Kadastrovie Novosti”, 11 September 2009. Federal Cadastre Agency for Real Estate, Media Materials: 14 July 2010 http://r41.kadastr.ru/news/media/1059085/.

Reporting on land tax raises as a result of new Cadastral evaluations.  Land values in Samarskaya Oblast are up 40-60%, in Rostovskaya Oblast they have increased 5 times over, and in Smolensk Oblast they are up 47.7 times.  Rosnedvizhimost’ officers say that tax rates have not yet been adjusted to new market conditions coming after a peak in the land market in late 2007/early 2008.  A managing partner of Miller Samuell Real-Group says these taxes “will simply kill any proprietor and will place a cross on the back of any business.”  In Smolenskaya Oblast, values of land plots under industrial enterprises have increased 47 times, which specialists say will harm production costs, productivity of local industry, profits, and competitiveness.

Problems for other enterprises and administrative bodies have arisen: in Moscow, City Hall is threatening terminating developers’ contracts for residential construction on some 5 million square meters of land that Rosreyester is refusing to register.  The Moscow Oblast Forestry Management has gone against federal recommendations in completing some of its recent land transactions; similar forestry land-use scandals have taken place in Petersburg and Leningradskaya Oblast, as well.

Note: Recent (in action since January 2010) changes to the land tax code are outlined at http://taxpravo.ru/analitika/statya-71574-popravki_po_regionalnyim_i_mestnyim_nalogam_v_2010_godu.

Perpetual land – for three years

Vasil’eva, Yuliya. “Perpetual land – for three years: Business asks to postpone the buy-out deadline for land plots to Jan. 1, 2013” (“Zemlya bessrochno – na tri goda”), Rossiiskaya Biznes-gazeta 692, 3 March 2009. 1 July 2010 http://www.rg.ru/2009/03/03/zemlya-vikup.html.

Summary of the history and current state of the Land Code amendments; stresses business’ desire to privatize/restructure their land use, but inability to do so due to bureaucratic barriers and high buy-out prices.  Power-mongering and super-control of the restructuring procedures on the part of local powers also complicate the conditions in which businesses were being required to buy-out their land.   The decrease in businesses’ liquid funds due to the crisis—funds that would be needed for land transactions—also increases the hardship.

In addition to these issues, RSPP department head Irina Kotelevskaya notes the lack of a “good register of land territories” as another complicating problem.  In the federal Duma’s Committee on Property, “it has been noted that in crisis-time conditions, with the increase in the price of credit and the insufficiencies of working capital at many industrial enterprises, the direction of significant monetary resources towards the organization of the buy-out of land plots might just lead to a worsening of their financial situation all the way to near-bankruptcy.

Land is looking for an owner

“Land is looking for an owner” (“Zemlya ishchet sobstvennika”), Agentstvo “Kadastrovie Novosti”, 18 February 2009. Federal Cadastre Agency for Real Estate, Media Materials: 14 July 2010 http://r41.kadastr.ru/news/media/805304/.

A step-by-step description of what must be done by Vladivostok enterprises wishing to restructure its land use from permanent (perpetual) use into private ownership or a rent.  “The procedure for restructuring land plots is both technically and judicially complicated and multiphase.  Realistically, it can take no shorter than six months. . .”  Enterprises, paying for all these services themselves, must order an official topographic map of the property from an authorized organization (though these sometimes turn out to be poor quality); they must have documents drawn up stating how they desire to restructure their land; they must arrange for a cadastral evaluation of their land; and finally submit these items to the territorial division of Rosnedvizhemost’ and the Department of Land Resources.