Russia traditionally suffers from the land shortage

The Ministry of Economic Development of the Russian Federation presentend amendments to the article 396 of the Tax Code of the RF. It is suggested to increase the land tax fivefold if the proprietor didn’t build a house within 10 years of the date of land provision for private housing construction (PHC). The authorities explain that there is a big amount of undeveloped sites. It leads to inefficient use of localities’ lands and reduction of property tax levy. 

The position of the state is clear – to get an additional income, to involve the land into the turnover, to activate construction and investment activity. In some cases the land is acquired as a mean of long-term deposit and there is often a barren land  between the existing buildings as the land proprietors are not going to build anything there. 

At the same time, the question is whether it is legal to prejudice the rights of the people that use the land they possess in the way the State doesn’t expect them to.

The initiative of the regional authorities to give 1 ha of land for free to those who want to move to or to live in the Russian Far East, endorsed by the President V.V. Putin this week, will again depend on not only investment component, but also on the taxation. Whereas the underdevelopment infrastructure, the low quality of agroclimatic resources and expensive credit resources will essentially complicate the introduction of the lands into the turnover even if they have owners.