Photo: Valery Sharifulin/TASS
The apartment market — ersatz housing, to which developers tried to accustom Russians — is finally dying. The complete lack of demand was overlaid by the initiatives of the authorities aimed at eliminating violations of the legal framework.
Attempts to push through a bill that would settle everything have been met with opposition from officials of all ranks for several years. And there is every reason to assume that the apartments will soon be completely gone.
Premises intended for temporary residence (without the right to permanent registration) — this is about what apartments are meant in modern Russian legislation. They are frankly crooked, and all sorts of legislative innovations in the real estate market make this status more and more precarious. In general, some rooms, nothing more.
In fact, commercial real estate, the owners of which have to pay increased prices — 20 times more than for an apartment of a similar size! — property taxes. Housing and communal services are also much more expensive, plus a bunch of other unpleasant additions. Not to mention the fact that the houses that are built for these very apartments have a disgusting corridor layout and are built on the principle of maximum economy.
And often they were not even built, but “repurposed” from industrial (administrative) premises, and it was with such objects that the metropolitan authorities began to fight. With consequences that are completely unpredictable for those who have already managed to purchase real estate there. So far, the houses have been recognized as objects of unfinished construction and all transactions on them have been suspended. But in the future, their operation may be banned, and then demolished.
However, it is not only the houses that have decided to change their “profession” that are under the gun. Not all buildings built from scratch for apartments comply with the law. For example, such a type of permitted use of land as “Hotels and other places of temporary residence” in the latest edition of the Rosreestr documentation was transformed into “Hotel accommodation. That is, there are no “other places” anymore. And if not, then those are illegal.
On October 1, 2023, the law on value added tax on the sale of apartments came into force. From that moment on, when selling apartments (as well as any other commercial real estate), individuals must pay personal income tax in the amount of 13%, legal entities — VAT in the amount of 20%.
The main myth of the real estate market is the possible transfer of all existing and under construction apartments into housing. Since 2021, a law was expected to appear on the market that would equalize the rights of apartment owners and apartments. In this case, the owners would have the opportunity of permanent registration, lower utility tariffs and the same social and transport infrastructure.
But so far, such a transfer remains possible only within the framework of individual cases — there have been cases on the market when the developer independently transferred the project to the status of housing. And if we talk about the segment as a whole, today such an idea continues to exist only within the framework of discussions and fantasies, the prerequisites for its implementation have not appeared,” says Kirill Golyshev, regional director of the residential real estate department of Nikoliers.
Translated into Russian: that’s it, Hana. These buildings cannot be transferred to the housing stock, and it is unclear what will happen to them next. Save yourself, who can!
Bill No. 1162929-7 “On Amendments to the Urban Planning Code of the Russian Federation and Certain Legislative Acts of the Russian Federation regarding the Regulation of Certain Legal Relations Arising in connection with the construction of multifunctional buildings”, also known as the “Bill on Apartments”, was submitted to the State Duma in early 2021 and is still in limbo. It is constantly postponed, and it will obviously end up with the document simply going to the trash.
Undoubtedly, he has lobbying potential, and with a lot of zeros. Developers really want to rivet dormitory-type buildings inexpensively and sell square meters there. But everyone is against it.
“I will do everything to prevent this bill from being passed. This is pure fraud! This is a bypass of all approval procedures. Because the requirements for the construction of a residential apartment building are quite serious. They need to be coordinated. And this is how this agreement is bypassed,” says Galina Khovanskaya, chairman of the State Duma commission on ensuring housing rights of citizens.
Do not think that parliamentarians only care about the common people, there is a different problem here. The oligarchs from the construction industry just want to finally forget about all the rules for the construction of apartment buildings and rivet many, many aby as welded apartment buildings. Which will quickly become problematic, and people will start protesting. That is, an additional potential pain point. And no one needs one.
“Apartments are commercial real estate, actually offices or hotels with a residential function. “Short-lived,” if you like. The requirements for the construction of apartments are much milder than for houses with an official residential status, developers may not take into account the norms of the SanPiN. Hence the offers of apartments with an area of 5 square meters without windows,” says Oleg Repchenko, head of the Real Estate Market Indicators analytical center.
It is worth adding that the norms of the Housing Code do not apply to apartments. And music can scream in the next room around the clock, it is legally allowed to put all kinds of industrial (or office) equipment there, and in general it is a completely official “passageway”. Moreover, all the walls in which are made of cardboard — you can hear someone farting three floors above.
“Developers can build houses with apartments more densely, and in the vicinity of sanitary protection zones of highways, railway lines, engineering infrastructure facilities – unlike buildings with apartments. During the construction of apartments, it will be necessary to allocate space for infrastructure and place buildings at a greater distance from each other to comply with the requirements for insolation, which ultimately affects the cost,” explains Alexey Popov, head of the CIAN Analytical Center.
Anthill blocks, during the construction of which the developer saved on infrastructure by shifting these costs to others, are also not particularly interesting to the authorities. There are no shops, parking lots, kindergartens, schools and everything else. And, most importantly, there is no accounting and control over who lives there. And this is quite dangerous.
It is understandable not to buy apartments. And what should those who have already invested in this good do? According to the latest data, the budget of transactions with secondary housing in Moscow has fallen to a minimum in the last three years. And whether it will still be! Moreover, we are talking about normal houses with normal apartments, and not about apartments with more than dubious prospects.
Selling apartments, if you have any, is undoubtedly worth it. That is, to try. However, it is unlikely that it will work out — after VAT was returned, demand fell to zero altogether. And now, when the capital’s mayor’s office threatens to start putting the real estate market in order, everything can fall apart altogether.
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