Property tax in Russia is calculated based on regulations set by municipalities within the overall framework outlined by the Russian Tax Code and may include various rates, deductions and privileges.
Individual taxpayers pay their income tax four times per year https://moscowestates.com/russia-blog/property-tax-in-russia-in-2024/: three quarterly down payments and the final one near year-end.
Residential property
Property tax in Russia is an annual fee paid to the government for owning real estate, usually calculated based on land values; as more residential properties you own, the higher your taxes become. Property taxes must be calculated and paid quarterly with a declaration filed at the end of every quarter with regard to assessed taxes paid as well as advance payments made towards future quarters.
Russian law imposes various taxes on individuals and companies who own residential real estate, such as personal income tax (PIT), property tax and sales taxes. The exact amounts vary based on factors like type and location of property owned; taxpayer status (i.e. Russian residents will pay more), etc. Nonresidents only incur taxes on income generated within Russia itself.
As part of their property tax obligations, owners must also pay an annual land use fee determined by local government bodies – usually 0.3% of total land value – regardless of its use – such as agricultural, residential or utility infrastructure purposes.
Acquisition or construction expenses on an apartment or house qualify for an IRS deduction of up to RUB 2 million, in contrast with capital gains realized from selling immovable property owned by non-residents which are subject to a flat rate of 20%.
Residential property can qualify a person as tax resident of Russia by spending at least 183 days each year there; in other instances, foreign citizens can become residents by signing a double taxation agreement between their home country and Russia.
Before completing any transaction, foreign citizens who want to purchase real estate in Russia must conduct thorough due diligence checks on both the land plot and title search, paying transfer fees and complying with currency control regulations. Due diligence plays an essential role when buying property abroad. It also protects investors who may be unfamiliar with local laws from making costly mistakes when investing overseas.
Commercial property
Russia differs significantly from the US in that most property tax collection is done at a local government level instead of being levied at state levels, similar to how taxes in most other countries work. Property tax in Russia can be levied at federal, regional and municipal levels with regional taxes often comprising corporate and land taxes as well as individual property and land tax levies being implemented locally.
Commercial properties in Russia are subject to tax only when used for business purposes and the usage is clearly specified in an official deed, such as office or retail space usage.
Russia requires its citizens to pay both a property and value-added tax (VAT). Although certain items, including food, shoes and medical equipment may be exempted from VAT charges, most Russians include VAT in their purchases price.
Businesses operating within Australia may also be subject to a trade fee imposed by the government as an incentive for small firms operating here, both local and foreign alike. This tax must be paid as profit and property tax are levied.
Russian property taxes are calculated based on an inventory value, which tends to be much lower than actual market price. This valuation is determined by state agencies and must be submitted annually by March 1.
Russia’s corporate property tax is a regional tax. Regions may regulate certain aspects of it within the overall framework established in the RF Tax Code, however. It applies both movable and immovable fixed assets recorded as company balances in company accounts; since January 1, 2013 any such fixed assets acquired prior to January are no longer included within its scope.
Land Tax in Russia is a local property tax which is levied at 0.3% for agricultural, housing or dacha properties and 1.5 percent on other lands based on their cadastral value. Rates are set by municipal authorities with exception to Moscow and Saint Petersburg cities which set theirs by city legislators.
Industrial property
Taxing industrial property in Russia involves numerous considerations, including an array of federal, state, and municipal taxes that vary between federal, state and municipal government bodies; they can often be changed or adjusted at local government bodies’ discretion within the framework set out in the all-Russian Tax Code. Regional authorities also have authority to levy levies based on local needs (for instance vehicle and gambling taxes), as well as creating special regimes for certain properties. Filing accounting documentation and tax returns is complex process but our Russian tax lawyers will gladly provide more details.
An immovable property owner in Russia who also holds foreign citizenship must file an annual declaration of income with the tax authorities in order to ascertain their total taxable income, with submission due by March 31 of the following year. Furthermore, tax authorities assess personal asset valuation and may assess supplementary taxes on them – these should usually be paid through individual or enterprise tax payment accounts.
Commercial properties include land, shopping centers, factories and farms. Their taxation resembles that of residential property but with different rates set by municipal authorities – with the exception of federal cities of Moscow and St Petersburg where city legislators set them). Tax rates may either be reduced to zero or increased up to three times higher than its cadastral value; depending on use this can range anywhere between 0.1% of residential units taxed yearly to 1.5% taxing commercial real estate properties.
Rental income earned by individuals or legal entities who own properties is subject to income tax at the progressive rates of 20 percent for residents and 18 percent for nonresidents, as well as to unified social tax (UST), which accrues on all employer-to-employee payments that qualify as deductions under profit tax rules but aren’t included when computing income tax liabilities; this tax does not qualify for reduction through double tax treaties.
Land
Russia’s local and regional taxes primarily target assets, such as property, vehicle and gambling taxes. Exact rates are set by regional (property, vehicle and gambling taxes) or municipal (land taxes) legislators within the framework of their Code.
Taxation of land in Russia is determined based on its cadastral value, determined in accordance with Russian law. This valuation process may take various forms; most commonly it’s done using sales comparable properties in the area as evidence. Thus it’s vital that buyers of property in Russia be fully informed about these laws and regulations regarding cadastral values before buying land in Russia.
Russia levies multiple taxes on movable assets, including personal income tax and value-added tax (VAT). Furthermore, excise taxes and reduced VAT rates apply for food and medical items purchased in Russia. Typically goods include this tax rate when quoted.
Individual taxpayers facing an annual income over 5 million rubles ($45,000 after recent sanctions on Russia have caused its currency to collapse) are subject to a flat income tax rate of 13 percent; any deduction for children’s education costs up to 50,000 rubles can also be claimed and donations to non-commercial organizations and charities are also deductible from income taxes.
Companies are subject to a net profit tax rate of 20% on their net profit, with 85 percent of proceeds distributed back into regional budgets. Foreign companies operating without permanent establishment in Russia are subject to withholding taxes of 15% on payments made to them.
As a self-employed foreigner in Russia, you may qualify to register as either an individual entrepreneur (“individualny predprinimatel”) or private partnership (partnershiv). Taxation depends on how long you reside there as well as whether the activities performed are passive or entrepreneurial in nature. Self-employed foreigners usually pay the standard 13 percent rate when filing income taxes.