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On the cadastral value applicability as a tax base for the property tax calculation

Vol. 18, Iss. 34, SEPTEMBER 2015

Received: 18 March 2015

Accepted: 6 November 2015

Available online: 15 December 2015

Subject Heading: REGULATION AND STANDARDIZATION OF REPORTING

JEL Classification: 

Pages: 56-62

Il'ina A.V. Ural Federal University named after the First President of Russia B.N. Yeltsin, Yekaterinburg, Russian Federation
av-iliyna@yandex.ru

Il'in A.S. Governor’s Administration of Sverdlovsk Oblast, Yekaterinburg, Russian Federation
as-iliyn@narod.ru

Importance Under the federal laws introduced in 2014 by the Russian Federation Presidential Decree, personal and corporate property tax shall be charged as a percentage of the cadastral value of the property. The position of certain businesses further aggravated, as when comparing the carrying value of assets with the cadastral (market) value, there is an understanding that the tax base may increase tenfold for some taxpayers.
     Objectives The aim is to consider tax rate differentiation, as it can regulate the volume of tax liabilities and influence the investment attractiveness of the region.
     Methods Forecasting the tax revenues can be reduced to modeling the dynamics of the tax base against different economic parameters. In other words, the amount of fiscal charges is a basis for tax rate differentiation, taking into account the factors influencing the change in property tax assessment as a percentage of the cadastral value of the property.
     Results The preliminary analysis shows that the cadastral value array is not homogeneous for different real property items. Executive authorities should be selective in determining the list of taxable items on which property tax should be levied as a percentage of the cadastral value.
     Conclusions In some instances, the transfer to property tax assessment as a percentage of the cadastral value is beneficial for taxpayers, as today the cadastral value does not reflect the objective market situation at the date of appraisal, leading to underestimated tax base for property tax calculation.

Keywords: property tax, cadastral value, taxable base, differentiated tax rates

References:

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