How is personal property tax calculated?

The Russian government has introduced a new standard for calculating taxes on real estate and movable property of individuals in 2021. Now the tax amount is calculated taking into account the market value of the object for which the tax must be paid. The market value of real estate and vehicles is reflected in the cadastre and other official databases, where information about such property of Russian citizens is entered. Dramatic changes in the tax scheme have led to an increase in property taxes for ordinary people. At the same time, the legislator specified the circle of persons who are entitled to benefits when paying such fees.

The difference between cadastral value and inventory value

The government’s desire to increase revenues to the state budget after the fall in oil prices on the world market forced legislators to radically revise the Tax Code in relation to the scheme for calculating taxes on the property of Russian citizens. By increasing the personal property tax in 2021, the Russian government plans to significantly replenish the budget by increasing the amount of such fees.
The increase in the amount of tax on movable and immovable property of private individuals occurred due to changes in the very mechanism for calculating the amounts collected from private real estate.

The new law on property taxes for individuals 2021 will be based not on the inventory value of the property, but on the cadastral value. Inventory price indicators differ significantly from current market prices downward. Inventory value takes into account:

• time of commissioning of the facility;
• features of construction solutions of the property;
• prices for building materials and construction work.

Cadastral parameters for calculating the value of real estate are based on:

• development of infrastructure adjacent to the facility;
• location of private real estate;
• degree of comfort of private real estate;
• the proximity of its location to important social and public facilities.

If the inventory value almost always remained unchanged, then the cadastral value changes every five years and depends on the level of regional income of each subject of the federation. In fact, the cadastral value of housing is always calculated as the market value and reflects the real current price of the taxable property.

How property taxes will change in 2017

The main difference of the new taxation system is that now, when calculating real estate taxes, the cadastral value will be used instead of inventory property.

Inventory value is an assessment of the value of real estate, which is carried out by BTI employees. In this case, the assessment takes into account three main criteria:

• apartment area;
• year of construction of the house;
• communal amenities.

The cadastral value is calculated not only taking into account the area of ​​the house and the date of its construction. When calculating, they also take into account the location of the house in the city and region, the average cost per square meter of housing in the region, as well as the infrastructure adjacent to the house.

3D tour of a one-room apartment in the Harmony residential area

From which private objects will accruals be made?

Over five years, the cadastral value increases by an average of 20% every year. Therefore, private property taxes will always rise. To avoid a sharp increase in tax payments, the legislator has developed so-called reduction coefficients, which decrease immediately after their implementation, and the tax on private property increases, but gradually.

The gradual introduction of the new calculation scheme began in 2014. From 2021, the new tax will be levied in full. For most citizens, such fees will be 0.1% of the market value of their property. Usually these are housing and country houses. The list of taxable objects includes:

• residential buildings and premises;
• unfinished low-rise residential buildings;
• residential complexes;
• outbuildings measuring no more than 50 x 2 m.

When calculating tax fees, it should be remembered that payment is not levied on the entire area of ​​the property, but only on that part of it that is equated to surplus. The new property tax for individuals in 2021 provides for a tax deduction or refund of money with a minimum area of ​​taxable objects.
Thus, owners of privatized living rooms will be able to avoid paying tax for 10 m2. Owners of city apartments are exempt from paying taxes on 20 m2. Owners of private cottages do not have to pay for 50 m2 in their home. All remaining area is taxed as surplus.

When selling an apartment, the owner will first have to pay tax. If the transaction value is less than 1 million, then he is entitled to a refund of the taxes paid.

Deduction for “six hundred parts”

Since 2021, pensioners, veterans, disabled people and some other categories of citizens (the full list is indicated in paragraph 5 of Article 391 of the Tax Code of the Russian Federation) have received the right to a deduction when calculating land tax. In their case, the tax amount is reduced by the cadastral value of 600 square meters for one land plot, regardless of the category of land. If the plot is 6 acres or less, you do not need to pay tax; if it exceeds 6 acres, it will be calculated for the remaining area. A person who has two or more plots can choose the one for which the deduction will apply and send a notification about this to any tax office before November 1. By default, the deduction will be applied automatically to the single parcel with the highest tax amount.

To receive a deduction, you need to submit a statement to the tax office stating that you are eligible for the benefit. The application form is posted on the website nalog.ru. If you have previously reported your right to benefits on other property taxes, you do not need to write an application.

Calculation of tax rates

A special formula has been introduced to calculate tax payments:

Tax = (Nk x Sk - Ni x Si) x K + Ni, in which:

• Nk and Ni - cadastre and inventory taxes;
• Sk and Si - tax rates for cadastre and inventory;
• K is a reduction factor depending on the type of property.

The formula will remain in effect until 2021 to gradually increase residential property taxes. To do this, each year the decreasing coefficient will increase by 20%. By 2021, its size will have to be 100% in relation to the then current market value of taxable objects.

Table for calculating cadastral rates when calculating tax on private real estate

The tax rate always depends on the current price of the property, as well as on the purpose of the property itself. The new formula for calculating the interest rate is currently applied only if the cadastral value of taxable real estate is higher than the inventory value.

Important! To prevent a sharp increase in tax payments for individuals, the state has introduced a transition period that will last from 2021 to 2021.

Property tax for individuals from 2021

Property tax for individuals from 2021. Tax payers are individuals who have the right of ownership of property recognized as an object of taxation in accordance with Article 401 of the Tax Code of the Russian Federation:

1. House;
2. Living space (apartment, room);
3. Garage, parking space;
4. Single real estate complex;
5. Unfinished construction project;
6. Other buildings, structure, structure, premises.

If a residential building is located on a plot of land for personal subsidiary farming, dacha farming, vegetable gardening, horticulture, individual housing construction, then it belongs to residential buildings. Property that is part of the common property in an apartment building is not subject to taxation.

When property is owned by several individuals, each of them is recognized separately and pays tax in proportion to their share. The tax is paid according to the notification sent. The notice is also sent to minors who own real estate; it is paid by guardians or parents until they reach adulthood.

The tax is calculated based on the cadastral value of the property, which takes into account factors such as location, area, year of construction, etc.

Starting in 2021, the levy applies to local taxes and may increase or decrease from federal rates. Payment deadline is December 1st . The penalty is accrued from December 2

It can be quite difficult to calculate the taxes of individuals on your own, but for understanding: we find out the cadastral value of our property from reliable sources of the official website, for example, the Rosreestr website, from representatives of the local municipality we find out the percentage of the tax rate and calculate the corresponding depreciation (calculation of this indicator is done by a specialist using the formula ). The calculation procedure and formula are given in Article 408 of the Tax Code of the Russian Federation. But there are quite a few specialists who can correctly assess the cadastral value (this is in case you want to make such an assessment yourself in order to challenge the assessment at the tax office), some questions on challenging can also be found on the Rosreestr website.

When calculating the tax based on the cadastral value, it is provided for its reduction by:

10 sq.m. , for a room (if you are its owner, 10 sq.m. is not taxed)

20 sq.m. , for an apartment,

50 sq.m. , for residential buildings.

This deduction is provided for one of the selected objects of each type by the taxpayer himself, and does not depend on the number of owners and on whether the owners have benefits.

If the taxpayer has not notified the tax authorities in writing of his choice, then the choice will automatically be for the larger amount of the accrued tax.

According to the Law in Moscow, the cadastral value can be revised every two years. The first was approved on January 1, 2017. The next one will be approved in 2021.

These rates apply only to Moscow. Other regions must be viewed separately.

For tax periods, a reduction coefficient is applied

• In 2015, the coefficient was 0.2 to the amount of tax accrued on all objects.
• In 2021 the coefficient is 0.4.
• In 2021 the coefficient is 0.6.
• In 2021 the coefficient is 0.8.
• From 2021, the reduction factor will not apply.

Starting from 2021, it is possible to recalculate real estate tax at the cadastral value, regardless of the type of errors.

Tax benefit (you don’t pay tax) if you:

• Pensioner;
• The total duration of military service is 20 years or more;
• Disabled person of group I or II, or disabled since childhood;
• A family member of a military personnel who has lost their breadwinner;
• The spouse or father (mother) of a military serviceman or civil servant who died in the line of duty;
• Belong to another of the 15 preferential categories (Article 407 of the Tax Code of the Russian Federation)

You can take advantage of the benefit:

• One apartment or room at a time;
• One residential building;
• One garage or parking space.

The benefit can be used for each object, but taxes must be paid for the second of each object.

All citizens also have a benefit for one outbuilding on a summer cottage with an area of ​​no more than 50 sq.m. (shed, shed, etc.).

The benefit cannot be applied to real estate:

• used in business activities;
• worth more than 300 million rubles.

To receive a benefit, if you have not received one before, you must write an application to any tax office and provide documents for the right to benefit.

If you have not received a property tax notice, you must contact the inspectorate yourself. If you miss the December 1 payment deadline due to failure to receive a tax notice, you must contact the inspectorate, but they, as a rule, will not admit the mistake and you will have to pay a penalty. If this is done intentionally, a penalty will be charged for late payment of tax and a fine will be charged for failure to provide relevant information in the amount of 20% of the unpaid tax amount.

By contacting us for advice or practical assistance in calculations, you will receive comprehensive information, time savings, and other important answers to questions regarding taxation and benefits. We are waiting for you at any of our offices. We will help you calculate all the individual taxes that you must pay, but we will also calculate the required deductions, which can significantly reduce your tax.

Who will be exempt from payments?

From 2021, the following are completely exempt from paying taxes on residential properties not used for commercial purposes:

• Knights of the Order of Glory, Heroes of the Soviet Union and Heroes of Russia;
• disabled children;
• veterans of the Great Patriotic War and the war in Afghanistan;
• persons affected by nuclear tests, liquidators of the Chernobyl accident and those who worked in the field of nuclear weapons testing.

Beneficiaries who own several apartments can apply for their residential property tax benefits for only one property. For the rest, they will have to pay tax based on the cadastral value of housing. They can exempt any object they own from taxation by issuing preferential documents for it.

Important! Only federal benefits remain unchanged. Regional benefits will depend on the size of the regional budget, the ability of regional authorities to support those categories of the population that have received regional benefits in paying property taxes.

In addition, a temporary exemption period is being introduced for owners of real estate purchased after January 2021. If, for example, a mother of two children bought a new home during this period, then she can pay taxes without paying the 13% DFL fee after 5 years from the date of purchase.

This is provided for in Art. 217 clauses 1-2 of the Tax Code of the Russian Federation, which came into force at the beginning of 2021. Until this time, owners of new apartments could not pay taxes on the purchased property for three years from the date of purchase.

What benefits are provided?

According to the new law, the least protected groups of the population can count on property tax benefits for individuals in 2021, including Heroes of the Soviet Union and the Russian Federation, pensioners, disabled people of groups I and II, military personnel, individuals who have suffered radiation sickness and other categories citizens.

The following real estate properties are taxed at a preferential rate:

• apartment;
• room;
• a private house;
• garage;
• parking space;
• a building or structure specially equipped as creative workshops, ateliers, studios, as well as premises that are used as museums, galleries or libraries;
• outbuildings.

To receive benefits, an individual must, in addition to a personally signed application, present a list of documents confirming the right to receive benefits.

Bottom line

It should be noted that the new property tax in 2021 for individuals demonstrates a trend of increasing tax collections from ordinary citizens who are taxpayers. New articles of laws demonstrate a tendency to expand the tax base of the state to create conditions for stable revenues to the state budget from payments from private individuals, which should in the near future become the main source of state income, replacing the decreased revenues from oil and gas production.

Property tax deductions for individuals

In addition to the above benefits, all citizens are entitled to tax breaks in the form of a deduction from the cadastral value for the first four years. The bottom line is that a certain amount is subtracted from the total cadastral value of the property, which depends on the type of property. For example, for apartments the cadastral value is reduced by the cost of 20 square meters, for private houses the cadastre is reduced by the cost of 50 square meters.

Moreover, legislative bodies of local self-government, as well as authorities of federal cities, can provide larger deductions.

In addition, during the first four years after the introduction of amendments to the law, reduction factors will be taken into account when calculating property taxes.