Reduced the cadastral value of a land plot by almost RUB 4.6 million

A representative of the Government of the Krasnoyarsk Territory asked to refuse to satisfy the administrative claim, citing the significant reduction of the cadastral value.

The administration of Krasnoyarsk also objected to the claims.

In particular, the submitted market valuation was called into question, and it was claimed that the value of the land plot was underestimated due to the appraiser’s applied approach not complying with the requirements of the federal valuation standards.

Thus, the dispute effectively came down to the question: can the report on the market value submitted by the owner be trusted?

The court examined the submitted valuation report in detail.

The appraiser applied the comparative approach and the sales comparison method.

The court established that:

• a real estate market study was conducted;
• the selection of comparable objects was justified;
• the approach and valuation method were chosen reasonably;
• adjustments were made for significant price-forming factors;
• the calculations contain no mathematical, methodological or arithmetic errors;
• the content of the report complies with the requirements of the legislation and the federal valuation standards.

The parties to the case did not submit evidence of a different market value of the plot.

A request for a court examination was also not made.

As a result, the court had no grounds to doubt the conclusion of the independent appraiser.

The law allows challenging the results of the state cadastral valuation if the established value affects the rights of the owner.

If the market value of the object as of the relevant date is proven, the cadastral value can be set at that market value.

In our case, the initial state valuation was:

RUB 19,173,515.97.

The market value confirmed by the court:

RUB 14,578,000.

The difference:

RUB 4,595,515.97.

Thus, the cadastral value was reduced by approximately: 24%.

For the owner of commercial real estate, an inflated cadastral value can lead to an increase in mandatory payments.

In the case under consideration, the court itself indicated that the cadastral value of the land plot is used for tax purposes, and the owner’s rights were affected because the amount of the land tax depends on the cadastral value.

Therefore, reducing the cadastral value from RUB 19.17 million to RUB 14.58 million meant a reduction of the tax base for this land plot by almost a quarter.

The specific amount of tax savings must be calculated separately, taking into account the applicable tax rate and the relevant periods.

The administrative claim also raised the issue of entering the new value into the Unified State Register.

The court indicated that there is no need to separately resolve such a claim.

Information on the changed cadastral value, based on the court decision, is subject to entry into the Unified State Register in the manner prescribed by law.

This did not affect the main result:

the claim to establish the cadastral value of the plot at RUB 14,578,000 was satisfied.

A court dispute over cadastral value largely revolves around the quality of the evidence of the object’s market value.

In this case, the opponents directly called the submitted valuation into question.

However, the court verified:

• the applied approach;
• the chosen method;
• the comparable objects;
• the adjustments made;
• the market study;
• the mathematical and methodological calculations.

The report withstood this verification.

That is why the court accepted the market value of RUB 14,578,000 and established it as the cadastral value.

The case was handled by Konsultant Law Firm.

The interests of Krasnoyarsk Yeast Plant CJSC directly in the Krasnoyarsk Regional Court were represented by Viktor Erofeev, a lawyer of Konsultant Law Firm.

In the court process, it was necessary to substantiate the owner’s right to review the cadastral value and to defend the submitted market valuation report against the objections of the parties to the case.

The court accepted the position of the administrative plaintiff and satisfied the claims made.