We tell you when to pay the land tax, who is exempt from paying it, and what formula is used to calculate the payment of real estate tax
The owners of land plots must pay tax for them annually, otherwise a penalty fee will be charged and eventually the tax service will recover funds from the debtor through the court. Together with the experts, we talk about all the most important things in the land tax.
Content:
Experts in the article:
- Ekaterina Boldinova, Lawyer, Partner and Head of Tax Practice at Five Stones Consulting Law Firm;
- Julia Loukhina, Head of the law firm “Jurmeister”;
- Denis Korzhavin, lawyer at Tomashevskaya & Partners;
- Asya Alekseenko, Financial Director, owner of the consulting center “Grand”.
rbc.group What is a land tax?
Land tax is a type of property tax that is levied on land owners for the right to use land. This tax is local, it is established by normative legal acts of representative bodies of municipalities. In the cities of federal significance — Moscow, St. Petersburg and Sevastopol — it is regulated by the laws of these subjects.
The exception is the sections:
- withdrawn from circulation. Nuclear power plants, military units and secret facilities may be located on such lands;
- limited in circulation. Such sites may be occupied by cultural heritage sites, sites that are included in the World Heritage List, as well as archaeological heritage sites, museum reserves and historical and cultural reserves;
- included in the common property of apartment buildings. In such cases, we are talking about the land on which the house was built, as well as the surrounding area.
The tax base of the land tax
The land tax base is the cadastral value of a land plot that is recognized as an object of taxation. The calculation for each land plot for which the tax is paid is carried out based on its cadastral value as of January 1 of the year for which the land tax is paid. The tax period is considered to be a calendar year, and the cadastral value of a land plot itself is determined based on the results of the state cadastral valuation of land, explains Yulia Loukhina.
For newly created plots, the cadastral value established in the Unified State Register of Real Estate (EGRN) on the date of its entry is used.
How to find out the cadastral value of a plot:
- from the EGRN statement;
- with the help of the service “Online reference information on real estate objects” on the Rosreestr website. The cadastral value of the site will be indicated on the date of the last database update;
- on the interactive map in the section “Public interactive map” on the Rosreestr website.
Read more: How to find out the cadastral value of real estate. Instruction manual
Land tax rates
Land tax rates vary depending on the categories of land and (or) the permitted use of the land plot, as well as on the location of the taxable object. The land tax rate varies from 0.3% to 1.5% (clause 1 of Article 394 of the Tax Code).
The tax rate of 0.3% applies to land plots:
- assigned to agricultural lands or to lands within agricultural use zones in populated areas and used for agricultural production;
- occupied by the housing stock and engineering infrastructure facilities of the housing and communal complex (housing and communal services), with the exception of the share in the right to a land plot belonging to an object that does not belong to the housing stock and engineering infrastructure facilities;
- purchased (provided) for personal subsidiary farming, gardening, horticulture or animal husbandry, as well as country farming;
- limited in turnover in accordance with the legislation, provided for defense, security and customs needs.
In order to apply the reduced land tax rate (0.3%) to agricultural land, it is necessary that the land plot:
- it belonged to agricultural lands as part of agricultural use zones in populated areas;
- it was used for agricultural production according to its intended purpose.
For the remaining land plots, a rate of up to 1.5% of their cadastral value is set (letter from the Ministry of Finance dated May 26, 2016).
Who pays the land tax
In accordance with Article 388 of the Tax Code, land tax payers, regardless of the status of an individual or legal entity, are:
- land owners;
- landowners on the right of lifelong inherited ownership;
- land users have the right of permanent (indefinite) use, except for tenants.
If the land plot belongs to an organization or an individual on the right of gratuitous use or is leased, then you do not need to pay land tax, says Denis Korzhavin.
When the land tax is paid by a legal entity, it does not matter which tax system is applied by the taxpayer, explains Yulia Loukhina. According to the expert, this may be a general taxation system (OSN) or a special tax regime, when a taxpayer applying the simplified taxation system (USN) is obliged to transfer land tax if he has a land plot on his balance sheet.
Do pensioners pay land tax
Pensioners are entitled to a tax deduction in the amount of the cadastral value of 600 sq. m. m of the area of one land plot, which is owned, permanent (indefinite) use or lifelong inherited possession. If the area of the plot is no more than six acres, then the pensioner will not be charged. However, if the area of the land plot exceeds six acres, then the tax will be calculated for the difference, in fact for the remaining area, says Asya Alekseenko. The expert also notes that the deduction is applied to one land plot at the choice of the beneficiary, regardless of the category of land, type of permitted use and location of the land plot within the territory of the country.
If several land plots are owned, taxpayers have the right to submit to any tax authority a notification about the land plot in respect of which they want to apply a tax deduction. If such notification is not received from the taxpayer, the deduction will be automatically applied to one land plot with the maximum calculated amount of tax, explains Asya Alekseenko.
Denis Korzhavin adds that since the benefit is established by federal law, regional laws cannot reduce it, but they can introduce additional benefits. For example, in St. Petersburg, pensioners are completely exempt from land tax in respect of one land plot with an area of up to 2.5 thousand square meters (paragraphs 10, paragraph 1 of Article 11-7-1 of the Law of St. Petersburg No. 81-11 “On Tax benefits”).
Read also: Apartment sales tax: personal income tax instructions
The land tax applies to local
Who is exempt from paying land tax
There is no need to pay land tax to organizations that are registered on the territory of the Kuril Islands during the period when such organizations use the right to benefits when paying income tax, says Ekaterina Boldinova. The expert adds that organizations and citizens specified in Article 395 of the Tax Code are also exempt from land tax. This:
- the bodies of the penal enforcement system in relation to the sites allocated for the work of departments;
- religious organizations;
- all-Russian public organizations of people with disabilities;
- organizations of folk art crafts;
- residents of special economic zones;
- the small peoples of the North, Siberia and the Far East;
- shipbuilding organizations — residents of the industrial and industrial special economic zone;
- participants of the free economic zone.
Individual exemptions may be established by acts of municipalities. For example, in Moscow, Heroes of the Soviet Union and Heroes of the Russian Federation are completely exempt from paying land tax (clause 14, clause 1, Article 3.1 of the Law of the City of Moscow No. 74 “On Land Tax”), adds Denis Korzhavin.
Land tax benefits
At the federal level, there are separate tax advantages for paying land tax (benefits). Thus, the tax base for land tax is reduced by a tax-free amount in the amount of the cadastral value of 600 square meters. m of land area.
A tax deduction is provided in respect of one land plot at the taxpayer’s choice for the following categories of citizens:
- disabled people of the first and second groups;
- disabled children;
- children with disabilities;
- veterans and invalids of the Second World War;
- veterans and invalids of military operations;
- persons from special risk units;
- Chernobyl victims and citizens exposed to radiation at the Mayak and Semipalatinsk test site;
- pensioners and pre-retirees. The latter include 55-year-old women and 60-year-old men. Those who would have been eligible for a pension earlier than this age according to the rules in force before the retirement age increase can also take advantage of the benefit. For example, women from the age of 50 and men from the age of 55 are exempt from tax if they have worked out 15 years of experience in the Far North or 20 years in areas equated to them;
- persons with three or more minor children.
Additional benefits may be provided at the level of municipal legislation.
Land tax declaration
Legal entities have not submitted land tax declarations since 2021, but the calculation of this tax is still carried out independently by the owners, explains Ekaterina Boldinova. Individuals did not submit declarations before this year, the amount of payment for them is calculated by the tax authorities.
The tax authorities also make calculations based on data on the cadastral value received from the Federal Register. If the amount of the calculated tax is greater than that which was independently calculated in the organization, then its representatives have the right to file objections with supporting documents, says Asya Alekseenko.
Notification of the calculated amounts of taxes and advance payments for taxes is submitted to the tax authority at the place of registration no later than the 25th day of the month in which the deadline for payment of the relevant taxes or advance payments is set, adds Yulia Loukhina.
Land tax rates vary depending on the categories of land and (or) the permitted use of the land
Calculation of land tax
The calculation of land tax for individuals is carried out by the tax authority. Organizations, despite the fact that they calculate the tax themselves, also receive a notification from the tax inspectorate. To calculate the land tax, the following data is used:
- cadastral value of the plot;
- the rate that is applied in the municipality in relation to this category of land.
For organizations that owned a land plot for an incomplete calendar year, the norms of paragraph 7 of Article 396 of the Tax Code apply:
- if the right to a plot is registered in the period from the 1st to the 15th day inclusive, the month is counted as full;
- if the right is received after the 15th day, this month is not taken into account for the tax.
The formula for calculating the land tax
H = Cs × Rd × Ns / K
The following values are used in the formula:
H — tax payable;
Cs — cadastral price of the plot;
Rd is the size of your share if the plot has several owners. If there is one, we take this parameter as one;
Hc — the tax rate;
To — the coefficient of ownership of the site during the calendar year, the year of ownership is taken as 100.
The amount of land tax can be found using one of the online calculators.
There is also a calculator on the website of the Federal Tax Service. The procedure is as follows:
- go to the online calculator page and select “land tax”;
- select the year for which the tax is paid;
- enter the cadastral number of the land plot;
- fill in the fields with the necessary information on the land plot;
- get the total amount of land tax.
The deadline for payment of land tax For individuals
Until December 1 of the year following the reporting one. Thus, land tax for 2023 will be paid by land owners before December 1, 2024 on the basis of tax notifications sent by the tax authority.
For organizations
The deadline for paying the land tax depends on whether the accounting periods are established in the municipality: the first, second, and third quarters. If yes, then at the end of each reporting period, an advance payment (a quarter of the annual amount) must be transferred. If not, the tax is paid once a year. The land tax is part of the EPP, so the calculated amount is transferred together with other payments. The deadline for payment is the 28th day of the corresponding month.
See also:
- How to calculate the property tax correctly
- Tax on the sale of an apartment: personal income tax instructions
- How to calculate the tax on the sale of a land plot correctly
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