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Towards a more healthy cadastral value

 

Courts are increasingly finding in favour of business regarding the revaluation of cadastral value. Another precedent for the public was presented by JSC ‘OMZ-Spetsstal’ who had the cost of 27 hectares of industrial land in Kolpino reduced by 50%. The court agreed with an independent assessment of the plot from the investment company Surveyor International Group, reducing their cadastral value in line with the market value: the largest plot was re-estimated from150.7 million rubles to 78.8 million. Large players on the real estate market have noted that courts are increasingly siding with business.

 
The ruling in favor of the company was issued by the Arbitration Court of St. Petersburg and Leningrad in mid-August. ‘OMZ Spetsstal’ contested the cadastral value, set on August 12 of last year, based on an independent assessment of Surveyor International Group market value of the sites on the same date that was concluded in March 2014, according to the case materials. The decision can still be appealed by the defendant – the FGBU ‘The Federal Cadastral Chamber of the Federal Service for State Registration, Cadastres and Cartography’up to September 12, 2014. However, experts say that the authorities rarely go to such lengths, preferring to abide by the court’s decision.

 
"It's standard market procedure. When the owner does not agree with the assessment, he first consults an evaluator, and afterwards challenges it in court, seeking to reduce the cadastral value to the market value” -says the president of NAI Becar Alexander Sharapov. “This practice is typical for many Western countries, when after mass estimates, 10-15% of the objects are estimated inaccurately, and the figure needs to be revised. Sometimes a property is valued below the market value. In this case, the business is happy and doesn’t go to court, in the opposite case they try to improve their conditions. The authoritiesdon’t take offence at such rulings, though they are not always in agreement. Thecourtsagreewiththebusiness."


According to specialists, business in principle is more successful in the courts than the state, and there are cases in practice where the cadastral value was succesfully reducedin this way to not just the market value, butbelow it by 10, 20, or even 30%. Some businessmen are trying to reduce the cost of land threefold, but in such cases the company does not take it on. In general, there is no pressure from the state on the courts to find in their favour.


"Unfortunately, in Russia we know that if there is a rigid state opinion on a particular subject, then the courts heed it, but the re-assessment of cadastral value is a different story", explains Alexander Sharapov.


The LLC ‘Pervayamebelnayafabrika’ is currently in the process of revaluating7 hectares of land.In this way, the company expects to save about 40 percent on the payment of property taxes. The court hearing is still a long way off,an independent appraiser is working on an assessment of the market value. "We’ve heard about both the positive and negative judgments on this matter", says CEO Alexander Shestakov. The company has no other plans for revaluation at present.
The GC ‘Teorema’ are very calm on the matter. "We calculated that in some cases we were paying less and more in others–what goes around, comes around”, says the owner Igor Vodopyanov. “We are now discussing the surrender value of a couple of plots in Petrodvorets, here, we’ll probably soon go to court.”


The fresh cadastral value of 120 thousand buildings with a floor space of more than 3000 sq. m in St. Petersburg should appear in September. A corresponding tenderwas announced bySmolny in June. This need is caused by a new method of calculating property tax, which St. Petersburg will move to from the beginning of 2015. The property tax of organisations will be calculated not on the basis of the net value of the property, but from the cadastral value. Payments in connection with this, according to some estimates, could increase by as much as 30%.

Anton Butsenko

"DelovoiPeterburg", 26/08/2014

Address for the article:  http://www.dp.ru/103e3w