Tag Archives: buy-out prices

GUZR calls for restructuring of permanent use

Panteleev, Aleksey.  “GUZR [Head administration of land resources] calls for restructuring of permanent use” (“GUZR prizyvaet pereoformit’ ‘bessrochku’”), Kommercheskie Vesti, 2 June 2010. 15 July 2010 http://kvnews.ru/archive/2010/jur21(947)/farm/14198/.

Update on restructuring of permanent (perpetual) use lands: 30% of Omsk enterprises [mostly small industrial enterprises] hold lands under permanent use.  Adds that in Omskaya Oblast until January 1, 2012, enterprises using land on which they own facilities, equipment, etc. can buy-out the land at a rate of 2.5% of its Cadastral value.  After that date, fines of 20 to 100 thousands rubles can be imposed, though at the federal level, considerations are being made to tighten these measures.

Also: “Perpetual use coming to an end.” Russian Real Estate, 9 August 2010. 16 July 2010 http://www.1rre.ru/news/doc/35747/.  On publication date, 80% of Omsk Oblast’s permanent (perpetual) users had been either been restructured as proprietors or renters, according to the GUZR of Omsk.

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.