Property taxes in Russia - going up???

[Bruce]

I wonder what the prognosticators / pundits (Andrew?) as well as the current owners of Russian property have to say about the potential for huge tax increases on Russian property in the near future?  The reason I ask is that a really nice village house is for sale in the village my wife's family spends their free time during the late Russian Spring / most of the summer / early fall.  When I heard that from my wife I said - how much, out of curiosity more than anything else - and she said $700, but hopefully we can rent it for much less this summer if the present owner does not sell it by then.  I felt my jaw dropping (out of disbelief, because it is a good piece of property) and I said, why don't we just buy it?  By the way, this is a summer house that can be lived in year round, with a good stove / excellent banya - of course with an outhouse, I believe in the attached barn, fairly typical, with good walls, actually well insulated.  Maintenance issues came up in my mind, but my wife said that would not be a problem, family would cover that no problem.  So, my wife said she would look into it - thats when the tax issue came up.  I have no problem giving the money to put it in my wife or other member of her families name.  I even offered to put it in our daughter's name.  Her family feels it would be a mistake to buy property because they think taxes are going to shoot up.  How high can they go???  They are probably thinking a couple of hundred rubles as huge.  Even if it is a thousand rubles, who cares as far as I am concerned. Its nothing when you consider I would have my own place for our small family when we visit relatives this summer - instead of all cramming into two small rooms in their summer place.  No arguing with the Babushka network though............or is there more to it than that.  So it looks like a no go, but any feedback (Elen are you reading these days).  I figure I should just buy it anyway - but if it would go against relatives of wishes, and it appears that it would than it is a no go in any event. 

[andrewfi]

Currently maximum 2.2% (dependent upon region). How high would it have to be to be uneconomic? - bear in mind that the taxpayers have to be able to afford the tax.

[Elen]

My jaw dropped as well after seeing such price I'm just sure your wife "lost" one zero at the end of 700$ 
As for taxes for property then now they are so little that I even don't remember how much we pay There were talks about increasing them. But firstly as Andrew told not many people here could pay them ( though many people had privatised their town flats and have summer houses in countrysides) And secondary since our law makers are the only one who have the "main" and "real" property in Russia ( and that property is far from summer house for 700$) I don't think any law which would make any real damage to family budget would be signed.
 So don't worry and buy that house Justmake sure there is no hidden facts ( like some "forgotten obligated heirs-at-law" , troubles with land and etc )because a price is really "suspected"

[Rvrwind]

I'd have to say that depending on the size of the property, location, etc., that price isn't too far off.
My friends from Moscow just bought a year around Dacha only 1 hour from Moscow for $2,500 & a friend here in tver just sold a lot that she had, no buildings or anything right on the edge of the city for $4,000. Property outside the ceter & the big cities is still pretty cheap & like Elen said, no way they will raise the taxes that high, nobody could afford to pay them & would lose their properties. Talk about another revolution, that would be the quick way to get one stared. Hell they went crazy over monetization of pensions not long ago & are still pissed about that. Raise taxes too high & I think that would be the proverbiale straw.
Strange thing is that property is that cheap but try & buy a friggin' dumpy little one room flat & they want 25-35,000 for it, go figure.
RVR-Canadian Cowboy/Agency Owner

[Bruce]

Well, thanks for the tax information.  Now I've gotten to her parents real fears - that the village is dying and they expect will be dead within five years.  $700 is the actual price and it is an excellent village house.  This is a village 1 to 1 1/2 N of Tver.  You go from the main road between Moscow and St. Pete to smaller roads until you finally get to a dirt road for about a mile to get to their village of 8 - 10 houses.  The dirt road is becomming grown over with weeds / plants etc. and only a great driver like her father can even navigate the road.  It is a shame because everybody knows each other in that village it seems for generations.   They believe they will have to relocate to a new village five years from now - and I would have to pay alot more at that time, so unfortunately, no deal.

[Elen]

dying villages is common thing now in Russia. In majority cases houses are bought at the end ( in the best case)  by people from towns for summer dachas

( I didn't get "relocating" stuff )

[Bruce]

Once the village has no inhabitants the father would buy a new dacha in a living village ie. with residents, since it appears there present village is unfortunately dying - what a shame!

[Elen]

Well if you wnat to have a house exactly in "living" village thenthat's your choice but like I said to buy houses for dacha in dying villages is common thing here now

[Rvrwind]

Lets all get together & buy the whole village, turn it into our own little piece of the west, right in the middle of Russia. I'm here year around & can take care of the place when you guys arn't here.
Wouldn't that freak out the locals, LOL.

[Jet]

Lets all get together & buy the whole village, turn it into our own little piece of the west, right in the middle of Russia. I'm here year around & can take care of the place when you guys arn't here.
Wouldn't that freak out the locals, LOL.

Complete w/ 110v power and bathrooms where the tub toilet and sink are all in the same room? 

I'm in!

[BradSTL]

Just curious... is it safe to assume that property taxation (real property/ad valorem taxation) works in Russia as it does in, say, America?

There is an office where records are kept of the appraised/estimated value of property, an assessor of some sorts that determines the value, that any values are logged in a book?

The governments that draw revenue from property taxes adopt a levy (fixed-hard dollar/ruble amount of money), and the levy is spread across the compiled values, exemptions/credits considered, that generates the exact bill?   

Is this so?

[Phil dAmore]

Lets all get together & buy the whole village, turn it into our own little piece of the west, right in the middle of Russia. I'm here year around & can take care of the place when you guys arn't here.
Wouldn't that freak out the locals, LOL.

Sounds good to me!  Can I be the mayor?

w/r/t taxes... all I know is that the annual налоги for my apartment has remained steady at 150 rubles a year... when they remember to send the bill

[catzenmouse]

Complete w/ 110v power and bathrooms where the tub toilet and sink are all in the same room? 

I'm in!

... and NO SHELF in the toilet! 

We'll start packing now.

[jb]

Just curious... is it safe to assume that property taxation (real property/ad valorem taxation) works in Russia as it does in, say, America?

There is an office where records are kept of the appraised/estimated value of property, an assessor of some sorts that determines the value, that any values are logged in a book?

The governments that draw revenue from property taxes adopt a levy (fixed-hard dollar/ruble amount of money), and the levy is spread across the compiled values, exemptions/credits considered, that generates the exact bill?   

Is this so?

No, Brad, not quite.

Russians love to avoid paying tax of any kind.  It's almost a national pastime.  That's why so many have an official primary job where they declare a very small wage income, and a second or third job where they are paid in cash under the table and never report any of that income.  Property tax is likewise not well managed and remains ridiculously low, for example, the annual property tax bill on my wife's Moscow flat is only about $150 per year compared to about $6,000 per year I pay on our house here which is evaluated at about half of what the Moscow property would fetch on the market now.  The situation is further complicated by "Propiska", whereby many elderly pensioners receiving a monthly pittance are residence registered in properties that they could never afford if property taxes were more in keeping with property values.  It is true that other family members earning more are also registered as propiska holders at the same address, however there seems to be no formula for sorting out the gross income per household for taxation purposes.  In our case, my wife and 2 stepsons have registered propiska at that flat, but report no wages for Russian income tax because the money earned here is hidden, so on the "official" books, the only income seen there is from our babushka living there, earning only a small government pension.   

You cannot compare the Russian and American systems of government revenue generation, they are not even close.

[BradSTL]

Illuminating, thanks jb.

[beattledog]

compared to the property taxes in this country, it is cheap, but it relative due to the  average salary and value of the property in the respective country

beattledog