Challenging cadastral value

What is happening

After a new state cadastral valuation, tax on a building has multiplied although the property itself is unchanged and there are fewer tenants. The owner wants to know whether this is an error or simply the market.

A company leases a plot from the city, and the rent is calculated from its cadastral value. For the tenant, a review of the value is a way of affecting the payment, and the right to seek one is not limited to the owner.

The state valuation body has refused to set the cadastral value at market value, finding the valuer's report non-compliant. The choice now is between correcting the report and reapplying, or challenging the refusal in court.

What the law says

• State cadastral valuation is carried out under Federal Law No. 237-FZ of 3 July 2016 "On State Cadastral Valuation" (the Cadastral Valuation Law) by state budgetary institutions of the constituent regions.
• The Cadastral Valuation Law allows the cadastral value to be set at market value: an application with a valuation report is filed with the budgetary institution, and its decision can be challenged in court.
• A separate route is correcting errors made in determining the cadastral value, such as wrong property characteristics or misclassification into a group or segment. The application goes to the same institution.
• The institution's decisions are challenged under the Code of Administrative Court Procedure. The court usually orders a judicial valuation, and its conclusions largely shape the outcome.
• For corporate property tax and land tax, the Tax Code generally applies the market value from 1 January of the year in which the application was filed. Delay therefore costs money.
• The right to seek a review belongs not only to the owner but also to anyone whose rights and obligations depend on the cadastral value, such as a tenant of public land.

What we do

• We carry out a preliminary analysis, comparing cadastral value with market data and assessing whether the process makes economic sense.
• We check the property's characteristics in the register and in the cadastral valuation report for errors that can be corrected without a valuation.
• We select a valuer, agree the terms of reference and review the report before filing to reduce the risk of refusal on technical grounds.
• We prepare and file the application with the budgetary institution and respond to its requests.
• We challenge a refusal in court, frame the questions for the judicial valuation and work with its findings.
• We explain to your accountants from which period and to which payments the new value applies.

What we will need from you

• A register extract showing the cadastral value and characteristics of the property.
• Title documents and the technical passport or technical plan.
• Tax notices or tax calculations, the land lease and the rent calculation.
• Information on the property's actual condition and use: wear, repairs, rental rates, occupancy.
• Any earlier valuation reports and decisions concerning the property.