MOSCOW, October 10 (RIA Novosti) – The Russian state has no ownership records for almost 40 percent of the country’s real estate ahead of a property tax increase due to start next year, a newspaper reported Thursday, citing official data.
In 18 of 83 provinces, that figure is upward of 50 percent, peaking in the western Smolensk Region, where the authorities have no idea who owns 77 percent of local real estate, Vedomosti said, citing a memo from the Federal Tax Service.
The problem has arisen because the state agency tracking realty ownership was only established in 1998, while its predecessor never compiled a cohesive database of title deeds, the newspaper said.
The Russian government plans to change property tax rules for individuals in 2014-2018, significantly increasing tax rates.
However, regional budgets may lose up to 45 billion rubles ($1.4 billion) a year due to problems in identifying real estate owners, Vedomosti said.
The government is considering a plan to classify as abandoned all real estate for which it does not know the owner, possibly leading to confiscation, an Economic Development Ministry official was cited as saying.
But real estate owners will likely have until 2020 to register on the state cadaster, giving them the chance to opt for taxation over confiscation, Vedomosti cited him as saying.