Insidious land tax in Russia and how it was in the USSR

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

Many summer residents and villagers ask a reasonable question: why should I pay tax on a house that I built myself? After all, I built it on my own site, with my own hands and with my own money.

And this is the right question, especially when not only residential buildings should be taxed, but also garden buildings on a foundation - baths, greenhouses. And this issue is all the more relevant when we are already paying tax on the land on which this house is installed. By the way, not in all countries the land plot and the house on it are taxed separately.

Why is this happening in Russia? In fact, the answer to this question goes back to the 1917 revolution. We figure out what's what.

Back to USSR

If we own a country house and a plot, then we pay two taxes for it. For land - land tax, for a house - real estate tax. This is the result of a separate legal regime for land plots and any other buildings.

The origins of this division go back to the October Revolution of 1917. It was then that the decree "On Land" was adopted, which completely abolished the right to private ownership of land.

“All land, upon its alienation, goes into the national land fund. Local and central self-governments, ranging from democratically organized non-socialist rural and urban communities and ending with central regional institutions, are in charge of distributing it among the workers.

Landowners' ownership of land is canceled immediately without any redemption. For the victims of the coup d'état, only the right to public support for the time necessary to adapt to the new conditions of existence is recognized."

The land was taken from the landlords and transferred to the peasants. The process of land confiscation on the territory of European Russia was completed by January 1918, and by the spring, their redistribution between new land users was over.

Private ownership of land plots was canceled, but with the legal regulation of buildings on these plots, everything was not so simple. In the Civil Code of the RSFSR in 1922, there was no provision for personal ownership of buildings on the ground, but the right of development appeared.

At first, only local authorities had the right to build, which fully corresponded to the ideology of communism. But after the Civil War, the country was devastated, and the state did not always have enough strength and resources to build it. Therefore, the authorities decided to legally empower citizens and cooperatives with the right to develop land plots. So, for example, the Council of People's Commissars Decree of August 8, 1921 appeared "On granting cooperative associations and individual citizens the right to build urban plots." Citizens were given the opportunity to build up those urban areas, "which cannot be built up in the near future with the funds of local executive committees."

There was still no ownership of land or houses. Instruction of the NKVD and NKYU No. 204/654, defined the right to build as "a real urgent right to erect buildings on urban and non-urban lands, to own, use and dispose of these buildings, within the period stipulated by the building contract." The duration of the development period gradually changed - it increased from 12 to 65 years.

However, this did not mean at all that now any person could run to the market for building materials and buy what he wants. Usually, construction, even when obtaining a building permit on its own, was carried out centrally, under the strict control of the state represented by local authorities, at their expense and in accordance with established standards and projects.

Then another document was adopted - the Resolution of the All-Russian Central Executive Committee and the Council of People's Commissars dated 1932-01-08 "On the provision of land plots to institutions, enterprises and organizations of the socialized sector for construction on the basis of the right of perpetual use."

This is how the construction of settlements and cities began with the help of factories, factories, cooperatives.

There were PSK - mobile construction columns that built up entire cities and towns. Even wooden houses were built in an orderly manner and according to standard designs.

Property taxes … no property

Despite the fact that there was no private property, the land belonged to the state, and the buildings generally had an incomprehensible status, for all this it was necessary to pay taxes. For example, there was a Decree of the Central Executive Committee and the Council of People's Commissars of 1930-23-11 "On the tax on buildings and land rent."

The document listed tax rates for different types of buildings, as well as rates and rules for levying land rent from built-up and undeveloped land. Rent was collected from both urban and non-urban land. From the buildings it was necessary to pay from 0.75% to 2% of their value, and the rent rates were set in kopecks per square meter, depending on the class of settlements and what exactly was built on a given land. The rates ranged from 0.5 to 350 kopecks per meter. If the land was already levied rent in favor of local councils, then there was no need to pay rent.

Did anyone have seditious thoughts not to pay tax? Probably not, because all the money went to a good cause.

The tax was levied “in order to strengthen local budgets, in particular to increase funds allocated for communal, housing and social and cultural construction,” the document said. In other words, the meaning of the taxes was that all subsequent construction was financed with this money.

On the other hand, a kind of rent per person was charged for both the house and the plot, since both belonged to the state or were built with its direct participation.

From building rights to private homes

After the Great Patriotic War, the state faced new goals and objectives. There was no money for housing construction, just as there were no free hands. Residents began to build housing “as an amateur”. Therefore, the authorities went to meet them and legalized the construction by the forces of citizens, although this did not correspond very much to the ideological guidelines of the Communist Party.

Therefore, the Decree of the Presidium of the Supreme Soviet of the USSR of August 26, 1948, "On the Right of Citizens to Purchase and Construction of Individual Dwelling Houses"

The new law was truly revolutionary at the time. With its adoption, the right of personal ownership of the constructed house appeared. The house could now be built, sold, donated by oneself.

“In accordance with the Decree of the Presidium of the Supreme Soviet of the USSR dated August 26, 1948,“On the right of citizens to purchase and build individual residential houses,”in connection with which the right to build was canceled, when performing notarial actions and considering court cases, one should proceed from the fact that that residential houses built by citizens before August 26, 1948 under construction contracts, regardless of the expiration of these contracts, should be recognized as belonging to these citizens on the basis of the right of personal property.

Letter of the USSR Ministry of Justice dated 05.05.1952 No. P-49 "On residential buildings built by citizens before August 26, 1948 under construction contracts"

The results were not long in coming. In just four years, from 1946 to 1950, 30,752 private houses were built in the cities of the region, with a total living area of 780,300 sq. m.

Legislators in every possible way avoided the term “private property” and replaced it with “personal property”. However, taking into account the legislative norms of that time, the language did not dare to call such buildings private property in full.

There were a lot of restrictions for the owner of a private house. The size limit for the house was not to exceed 60 square meters per person. There were a lot of requirements for height, room size, communications. In addition, the compulsory gratuitous seizure of a house belonging to a citizen on the basis of the right of personal property was allowed, and in the administrative procedure (Article 107 of the Civil Code of the RSFSR).

Or here's another, no less draconian rule: if a citizen or a spouse and their minor children have more than one residential building on the grounds permitted by law, the owner has the right to leave any of these houses at his choice, and the other house is obliged sell, donate or otherwise alienate within a year.

One way or another, from a legal point of view, it was at that moment that a unique legal moment was born - despite the fact that the land on which the house stood belonged to the state, the house itself was formally already in the personal property of the citizen.

What about taxes?

In the meantime, taxes have not gone away. They were still collected from the ground under the house, and from the house itself. And here is a document from the late USSR: Decree of the Presidium of the USSR Armed Forces of 1981-26-01 "On local taxes and fees."

A tax was levied on buildings at the rate of 1% of the inventory value of the house, and on land plots per square meter, depending on the class of settlements, in the following sizes: first class - 1, 8 kopecks, second class - 1, 5, third class - 1, 2, fourth grade - 0, 9, fifth grade - 0, 6 and sixth grade - 0, 4 kopecks.

However, many did not pay these taxes because they belonged to the groups of persons from whom the tax was not levied. For example, collective farms and those who paid agricultural tax, heroes of socialist labor, pensioners and members of their families, living with them and other persons were exempted from the tax on buildings. Land tax was not paid for plots in agricultural use, for haymaking or for grazing livestock.

By the way, the new law no longer contained phrases about the purposes for which these taxes are levied and about the fact that the money will go to finance new construction. Many citizens built individual houses entirely at their own expense, and no longer at the expense of the state, so the logic of collecting this tax has already been lost.

Privatization

The situation in this form existed until the collapse of the USSR. The right of ownership, which we are accustomed to, first emerged with the adoption of the Law "On Property in the RSFSR" in 1990. However, the houses and plots continued to “live” separately from each other legally.

In the 90s, when the Civil Code was adopted, lawmakers wanted to make buildings an indivisible object with a plot, as it is implemented in other countries. For example, in Germany, a house is considered a land improvement, and depending on the type and size of the building, the overall tax rate for that property changes. However, our lawmakers eventually abandoned this venture. This was influenced by the too strong communist lobby.

The result was a lot of real estate confusion. Someone registered the ownership of both the house and the plot, someone only the house, leaving the plot unregistered or in the status of life-long inherited possession, and someone vice versa. And in this form, purchase and sale transactions were concluded or an inheritance was formalized.

As a result, today there is a situation in which one person owns the site, and the house already belongs to another. And these people may not even be relatives. Courts are still considering similar cases.

Later, the authorities nevertheless realized themselves and prescribed the so-called "principle of the unity of the fate of land plots and objects firmly connected with them" in the Land Code.

All objects firmly connected with land plots follow the fate of land plots, with the exception of cases established by federal laws.

Article 1.5. Of the Land Code of the Russian Federation."

This principle means that a building or other structure located on a land plot is inextricably linked with it and, of course, cannot exist without a land plot. Thus, it is established that, as such, these objects, constituting a single land-property complex, should participate in civil circulation. Now it is impossible to sell a house separately from a plot, and a plot from a house.

However, this did not change anything for taxation. The land tax continued its separate existence from the real estate tax, and buildings and plots are today different objects and require a separate cadastral registration. And cadastral engineers will have to pay for both actions separately today.

Many lawyers consider this separation to be a flaw in our legislation. It regularly leads to disputes about whether this or that building on the site is real estate, and whether you need to pay tax for it. The presence of a capital foundation in this case is also a dubious sign. As a result, cases came to the courts when the log cabin was recognized as movable property, and the asphalt-concrete pavement on the site was real estate.

What will happen next?

Unbelievable but true. In Russia, they are really thinking about creating a single real estate object that would combine land plots and buildings on them. Such a revolutionary bill on amendments to the Civil Code was promoted by the Ministry of Economic Development. However, last year it was decided to be postponed until 2022. Probably, and so too many amendments in the field of urban planning lately fell on our shoulders. The new changes are too drastic to be introduced quickly. In addition, for many citizens, country houses with land plots have not yet been registered at all. Therefore, it is not known whether the innovations will get out of the box at all.

WAKE UP AND ACT

Russian citizen! If you do not show your activity today, it will be too late tomorrow. Put your signature under the appeal against the adoption of the Law of the Russian Federation "On Real Estate Tax". This is the only way you can save yourself and your children from total financial slavery! Your voice is important, because your voice is the voice of the people. And if all the people say their weighty word, we will be able to prevent such financial slavery of each of us individually and our people as a whole. Together we are strong!