At the end of 2021, a representative of the owner of a non-residential building in Moscow contacted Valrus with a request to challenge the cadastral value. The owner of the premises was in the process of trial with the tax authority to recover property tax arrears from him.
The room was an untapped attic in an administrative building. After analyzing the documents on the object, we came to the conclusion that, based on the actual purpose of the object, it is advisable to optimize the tax burden by excluding the premises from the List of objects taxable from the cadastral value, approved by Decree of the Government of Moscow No. 700-GD.
In this case, exclusion from the List would reduce the amount of property tax by at least 4 times. An individual who is not an entrepreneur is in any case obliged to pay tax on non-residential premises from the cadastral value, but depending on whether the object is included in the list or not, a different tax rate applies: if included in the List, the tax rate is 2% of the cadastral value, and if the object is not included in the List - that's only 0.5%.
According to the results of the analysis of the grounds for including the object in the list, inconsistencies were found, and literally in two court sessions in the Moscow City Court, we were able to help the owner of the premises to exclude the premises from the 700-GD List, excluding the entire building from it. The Moscow government did not appeal the decision of the first instance on appeal.
The court decision that came into force was presented as part of a response to the requirements of the tax authority in our client's trial with the Federal Tax Service. An act of disagreement with the tax authority was also drawn up and an application for recalculation of tax with an updated tax return was submitted to the tax inspectorate. Currently, overpaid tax is being refunded for several previous years.